Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

LONDON TRANSPORT BILL

Lords amendments agreed to.

Oral Answers to Questions — EDUCATION AND SCIENCE

Overseas Students

Sir John Biggs-Davison: asked the Secretary of State for Education and Science what saving of public money has resulted from the increase in overseas students fees; and what proportion of the saving relates to Commonwealth and non-Commonwealth students respectively.

The Under-Secretary of State for Education and Science (Mr. William Waldegrave): About £40 million of the previous £100 million total subsidy has so far been withdrawn. Under the old system, just over half the beneficiaries came from the Commonwealth.

Sir John Biggs-Davison: Is proper priority now being given to Commonwealth students? Have Her Majesty's Government in mind the special position of Cyprus, which has no institutions of higher learning?

Mr. Waldegrave: My right hon. Friend the Foreign Secretary has made available from his budget an increased number of bursuaries for Cypriots under the Commonwealth plan and the Government's plan for 1981–82. Indeed, the scheme administered on behalf of my Department by the committee of vice-chancellors has also made available support for outstanding postgraduate students. When the Overseas Students Trust report is concluded in the spring we shall be in a better position to see the overall picture on Cyprus.

Mr. Christopher Price: How does the Minister justify the extra subsidy that the Government have now decided to give EEC students as a result of halving the home student fee, while giving no help to Third world students who need the money a great deal more? Will he make any further exceptions along the lines of the EEC subsidy?

Mr. Waldegrave: Britain is a great beneficiary of the trade in students between the European Community and itself. On the latest figures available, about 4, 000 students from Britain go to Europe, whereas under 3, 000 students come here from the whole of the Community. Therefore, the balance of advantages is still very firmly with us.

Sir Paul Bryan: Will my hon. Friend give great: weight to the report of the Overseas Students Trust, when it is released, on the options open to the Government'? When doing so, will he bear in mind the special position of dependent territories such as Hong Kong?

Mr. Waldegrave: Yes, Sir. I am very pleased to give that assurance.

Mr. Flannery: Does the Minister realise that this Draconian action against students from overseas is diminishing all the richness and diversity that they bring with them? Worse, it means that the wealthiest students come here instead of our disseminating education to those who need it most. Is this not a wretched approach?

Mr. Waldegrave: The approach by means of funds earmarked by the Overseas Development Administration for the poorest students is aimed at meeting that problem in part. The hon. Gentleman's Government recognised that the old open-ended system could not continue and, of course, were the first significantly to increase overseas students' fees.

Mr. Cyril D. Townsend: Would not my hon. Friend be well advised to carry out a comprehensive review of these increases and give a little more attention to long-term trends in the Commonwealth and to the need to improve political and commercial relationships between Britain and the Commonwealth, rather than concentrating so much on next year's departmental budget?

Mr. Waldegrave: It is exactly for that reason that my Department, with other Departments, has given full co-operation to the Overseas Students Trust, which is producing a major report in the spring.

Mr. Dubs: Will the Minister take into account the fact that it is impossible to visit any Commonwealth country or to speak in Britain to people visiting us from the Commonwealth without being made aware of the dismay and upset that they feel at Britain having turned its back on students from those countries?

Mr. Waldegrave: That is a considerable exaggeration. We still take a large number of overseas students from Third world countries, especially from Third world Commonwealth countries. The numbers entering universities last year fell less dramatically than was predicted by some Labour Members.

Maintained Schools

Mr. Dover: asked the Secretary of State for Education and Science what is his latest estimate of the number of surplus school places, primary and secondary, in the maintained schools in England by 1984; and what is his target for the numbers which should be taken out of use.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): The 1977 study of school building estimated that by 1986 there would be 2·8 million surplus school places in maintained primary and secondary schools in England. Our target for the numbers to be taken out of use by March 1984 is 630, 000.

Mr. Dover: Will my hon. Friend confirm that he has given appropriate advice to the local authorities about whether they should reduce the number of children on a site or close some schools altogether?

Dr. Boyson: Two circulars about falling rolls went out from the Department last year. The first said that secondary schools should have four streams and mentioned the necessity for a variety of teachers in middle schools. The second circular used the now well-known phrase "schools of proven worth", and said that good sixth forms should not be affected and that single sex schools should be maintained where there is demand for them.

Mr. Dobson: In view of the undertaking that the Secretary of State gave to my hon. Friend the Member for Bedwellty (Mr. Kinnock) and others, will the Undersecretary tell us when he intends to publish the report of Her Majesty's Inspectorate, which was promised some weeks ago?

Dr. Boyson: I have not asked my right hon. Friend the Secretary of State about that today, but I shall do so later. If we have any last minute information on the matter I shall communicate it to the hon. Gentleman.

Mr. Jessel: After the big drop in the birth rate between the middle 1960s and the later 1970s, and the relatively small upturn since then, can my hon. Friend predict for primary and secondary schools respectively in which year school rolls are expected to fall to their lowest level and how far those levels will be below the present ones?

Dr. Boyson: The pick-up in the birth rate is nothing like the previous fall. It is a pick-up, but it will certainly not fill the schools again. We suggested reducing places by only four out of every 10 surplus. Obviously, we now have peak numbers at secondary school level. Primary schools are different. The first pick-up will be in 1986–87 and there will be a second in 1992–93.

School Closures

Mr. Cryer: asked the Secretary of State for Education and Science what criteria he has in mind when considering an application by a local authority for a school closure.

The Secretary of State for Education and Science (Sir Keith Joseph): I consider all proposals on their individual merits, taking careful account of the educational and financial issues involved, including any representations made by parents, teachers and governors.

Mr. Cryer: Is it not true that local authorities would prefer not to close schools and that Labour-controlled authorities especially wish to improve the pupil-teacher ratio, but that the Government give emphatic strength to the financial considerations and that Government cutbacks are forcing local authorities to consider the closure of nursery, primary and secondary schools? Will the right hon. Gentleman consider improving the educational component of the grant so that local authorities are not forced to make such invidious choices?

Sir Keith Joseph: No Minister can make any mistake here. Of course closing schools is unpopular, but we must keep a balance between educational progress and public spending.

Mr. Crouch: Is my right hon. Friend aware that the House will be pleased that he said that he will always consider school closures on their merits? Can he take on board the closure of primary schools, especially in small villages, where sometimes it is not just a question of

numbers but of educational opportunities? Even in a school with a small number of pupils, and perhaps only one teacher, that village is providing good education for the child and the child need not make a long or difficult journey on dangerous roads to another school.

Sir Keith Joseph: What my hon. Friend said is a factor that Ministers bear very strongly in mind. There are educational advantages and disadvantages in small rural schools and we must try to take both into account.

Mr. Beith: Will the Secretary of State confirm that his circular on small schools was not intended to be a signal to local authorities to close village primary schools that could reasonably be kept open? Will he reiterate the sound advice given in the circular about the special problems of village primary schools?

Sir Keith Joseph: I repeat that we try to take all the arguments for and against into account in each case and thus come to a decision on the merits in each case, including small rural and village schools.

Mr. Kinnock: In view of the enormous social, financial and educational problems encountered by families, children and communities as a consequence of school closures, will the Secretary of State consider changing the law and the financial arrangements so that bus services for school children who must travel longer distances can be fully restored to their 1979 position?

Sir Keith Joseph: The balance of argument in each case is for the local education authority to decide. However, if the hon. Gentleman has a particular point to make, perhaps he will either write or speak to me.

Teachers (Pay)

Mr. Kenneth Carlisle: asked the Secretary of State for Education and Science whether he has any plans to reorganise the pay structure of the teaching profession so that pay reflects to a greater degree than at present the supply of, and demand in, particular teaching skills.

Sir Keith Joseph: The power to change teachers' salary structures lies not with me but with the Burnham committee. A working party of that committee is studying the whole area of salary structure, but there is no indication at present of general support for the concept of differential pay for teachers of certain subjects.

Mr. Carlisle: Despite that disappointing answer, does my right hon. Friend agree that in almost every activity in Britain pay tends to reflect the supply of the skill demanded? Therefore, would it not be right to move to a system whereby mathematics and physics teachers, who are in short supply, would be paid more than teachers in other subjects who are in over-supply? Is it not necessary to do that to secure the right teachers' skills, which are essential to our national future?

Mr. Flannery: What about MPs? What is the hon. Gentleman worth?

Sir Keith Joseph: I am sympathetic to the general propositions postulated by my hon. Friend. The Cockcroft committee on mathematics teachers recommended a differential in their favour, while recognising that the Government already operate one. I am studying those recommendations at the moment.

Mr. Stoddart: Is the Secretary of State aware of the concern and anger that he has already caused in the teaching profession, let alone the concern that might be caused by anything new? Why will he not allow the present teachers' pay dispute to go to arbitration?

Sir Keith Joseph: That is a quite different question.

Mr. Stoddart: Well answer it.

Mr. Madel: In considering the future pay structure, should not the Burnham committee consider whether teachers have had in-service training or attended a retraining course and act accordingly?

Sir Keith Joseph: That is another good idea that I am sure should be taken into account. My representative on the Burnham committee is already associated with the proposals for revised salary structures put forward by the management side of the working party, but there are important questions still to be settled such as, for example, how the competence of teachers can best be assessed.

Mr. Kinnock: Will the Secretary of State tell us whether, when his representatives on the Burnham committee meet on Thursday as a management panel, they will be free to support a reference to arbitration of the teachers' pay dispute?

Sir Keith Joseph: I do not believe that the hon. Gentleman really expects me to answer that question.

Sixth Forms

Mr. Pawsey: asked the Secretary of State for Education and Science what is his policy towards the retention of school sixth forms; and if he will make a statement.

The Under-Secretary of State for Education and Science (Mr. William Shelton): My right hon. Friend's views are set out in the draft circular issued far consultation on 24 November last.

Mr. Pawsey: Does my hon. Friend agree that sixth forms do a great deal for schools, that the pupils in those sixth forms acquire responsibility, and that if we move towards tertiary or sixth form colleges there is a risk that some of the better teachers might leave schools to go to those colleges, to the detriment of the school that they have left?

Mr. Shelton: I entirely agree with my hon. Friend that sixth forms in schools provide a tried and tested way of educating youngsters at sixth form level.

Mr. Christopher Price: How can the Minister know better than a local education authority how to organise its sixth form provision?

Mr. Shelton: I remind the hon. Gentleman that the Secretary of State has a duty by statute to consider the proposals put to him by the local education authorities.

Mr. Greenway: Does my hon. Friend agree that education is a matter of principle, and one needs to be guided by principles? Is it not a long-standing, accepted and widely valued principle that sixth forms in schools have given leadership and other benefits to schools that cannot come to them in any other way?

Mr. Shelton: I entirely agree with my hon. Friend.

Mr. Flannery: Is not the pressure for tertiary colleges now developing in the educational orbit and are not sixth

forms, although they have played a valuable role, now at a stage where, if they become smaller and smaller, they will become separated from life around them, while tertiary colleges will mean a greater expansion of education and a rubbing of shoulders with many people beyond the school age in the same educational set-up?

Mr. Shelton: The Government are not opposed to sixth form colleges and tertiary colleges. However, when a sixth form has proven its worth it would be wrong to destroy it. I accept that there may be specific, special and compelling reasons to examine the matter, and each case must be judged on its merits.

Aston University

Mr. Cadbury: asked the Secretary of State for Education and Science if he has had further representations from Aston university regarding the reduction in its grant by the University Grants Committee.

Mr. Waldegrave: As well as other representations received, my right hon. Friend and I have both visited Aston university recently and have been able to hear the views of staff and students at first hand.

Mr. Cadbury: Is my hon. Friend aware that the University Grants Committee has recommended the closure of the biological sciences department at Aston university? Does my hon. Friend agree that the kind of research carried on in this faculty, which involves close co-operation with industry on projects of great commercial potential, make it precisely the wrong place to close? Will my hon. Friend therefore urge the UGC to change its recommendations in this respect?

Mr. Waldegrave: The UGC has recently written to the vice chancellor of Aston discussing his proposal to make larger cuts in engineering than proposed in order to keep open the biological sciences department. These matters are still under discussion between the university and the UGC.

Mr. Whitehead: Does the Under-Secretary agree with the statement made by his right hon. Friend the Secretary of State in a debate on television with the vice chancellor of Aston university that of the technological universities, only two have suffered cuts, while three have expanded, and eight have remained stable? Does the hon. Gentleman think, on reflection, that that statement can be justified, particularly with reference to Aston university?

Mr. Waldegrave: Yes, Sir.

Mr. Sheerman: They are traitors to our education.

Secondary Education (Croydon)

Mr. Beith: asked the Secretary of State for Education and Science why, in announcing his decision on the reorganisation of secondary education in Croydon, his Department described the sixth form college system as novel and untried.

Sir Keith Joseph: Croydon's proposals would have established a tertiary, not a sixth form, college. What was novel and untried was that the college would have been organised in five separate, semi-autonomous centres.

Mr. Beith: In view of that reply, will the Secretary of State make it clear that he is not trying to signal to local education authorities that they should avoid proposals


involving either sixth form or tertiary colleges, because that is the impression that he has given so far in no less than three decisions? Will he make it clear that he is not trying so to change the role of the Secretary of State that he wholly excludes from consideration a system that has been tried and proved successful in a number of education areas?

Sir Keith Joseph: I am not trying to exclude any particular solution. I am trying to put down the balance of arguments as I see them, following the draft circular that has been out for consultation in the last few months.

17-plus Examination

Mr. Haselhurst: asked the Secretary of State for Education and Science what linkage there will be between his plans for a course of education leading to an examination at 17-plus and the new training initiative.

Mr. Wiliam Shelton: These are complementary intiatives, and the youth training scheme is likely to have some elements in common with the new 17-plus courses. The forthcoming statement on the new qualification at 17-plus will describe arrangements for collaboration between the body which will be responsible for that qualification and the body responsible for the content of the youth training scheme.

Mr. Haselhurst: Is my right hon. Friend satisfied that there has been sufficient consultation between his Department and the Manpower Services Commission to ensure that when the new examination course is established there is a fairly clear and obvious choice for people who are being advised, whether to take that route or to go on to one of the schemes under the new training initiative? Can he also tell us whether there is a possibility of a person moving from the 17-plus to another exam?

Mr. Shelton: I am aware of my hon. Friend's great interest in this matter and I assure him that there has been constant and steady consultation. The only way that one could move from the 17-plus to the youth training scheme would be through unemployment, which we hope will not happen.

Miss Boothroyd: In view of the cuts in the grants for colleges of further education, how does the Minister intend to ensure that young people have the off-job training that has been guaranteed under the new training programme?

Mr. Shelton: The hon. Lady is wrong. There have been increased grants for colleges of further education. There have been two increases: part of the £50 million allocated will go to colleges of further education. In addition, there is the further £35 million announced by my right hon. Friend in December.

Mr. Butcher: While my hon. Friend is considering initiatives on the 17-plus, may I ask whether he agrees that some confusion would be caused if we were also to introduce a new 16-plus? Will he resist any pressures that may be brought to bear on him to merge GCE O-levels and CSE examinations?

Mr. Shelton: That is a separate question, but I can tell my hon. Friend that the matter is under consideration.

Mr. Dobson: How can the Minister guarantee that the extra money that he has just quoted will actually go to further education? How does he know that it will not be

diverted to other parts of the education service that are desperately short of money or, for that matter, spent on mending holes in the roads under the block grant system?

Mr. Shelton: We trust the good sense of the local education authorities.

Universities and Polytechnics

Mr. Skinner: asked the Secretary of State for Education and Science what further representations he has received about the cuts in university and polytechnic allocations.

Mr. Waldegrave: My right hon. Friend continues to receive a variety of representations about the financing of higher education.

Mr. Skinner: Is the Minister aware that a few days ago a group of students from the Derby Lonsdale college of higher education and the Matlock college marched the 150 miles from Derbyshire to London to protest against the massive reduction imposed by the Government's cuts? Is it not true that the reductions in the number of places in colleges, universities and polytechnics will ensure that those who get special schooling pass the exams to get to Oxford and Cambridge, where the present intake from public schools is 47 per cent.? Therefore, will not that percentage rise because of the UGC cuts?

Mr. Waldegrave: I shall reply to the hon. Member's point about the Derby colleges. My hon. Friend the Member for Derbyshire, West (Mr. Parris) has been in regular consultation with me about Matlock, which is in his constituency. I have met a top level delegation of local authority and college leaders from Derby Lonsdale, and neither college faces insuperable problems.

Sir William van Straubenzee: With regard to universities, is there not evidence that after the initial shock the broad strategy set out by the UGC is gaining considerable acceptance? Is it my hon. Friend's experience, as it has been mine, that in a number of universities two speeches have been made, one for public consumption and one for private discussion?

Mr. Waldegrave: The House will regard it as only natural that each institution makes as strong a case as it can. Needless to say, there are many within the university system—for example, Professor Bernard Crick and Professor Randolph Quirk—who have accepted that the university system has some weaknesses that are being put right.

Mr. Dobson: They have not been put right, they have been made worse.

Mr. Whitehead: Does the Under-Secretary agree, following my hon. Friend's question, that the broad strategy, as it has been described by one of his hon. Friends, is one that will reduce the age participation ratio and probably the qualified participation ratio as well, which has traditionally been high in this country, throughout the lifetime of this Parliament and far beyond? Is that an achievement that the Government can call a strategy?

Mr. Waldegrave: The hon. Member knows that the Government have never disguised the fact that the age participation ratio for universities is bound to fall. It is necessary, in view of the savings that have to be made in public expenditure, that this is so.

Mr. Stokes: Does my hon. Friend agree that since the economies in education have been advanced much nonsense has been talked on the subject, that expansion in the universities since 1960 has been over-rapid, and that some decrease in activities would be both desirable and reasonable?

Mr. Waldegrave: I have heard many people inside the university system saying exactly the same thing.

Mr. Sheerman: Will the Minister help those hon. Members who have been approached by constituents who say "Last year my children would have gained a place at a university or polytechnic, but this year and in succeeding years under this Government they will not receive a higher education, although they have the same abilities"? What advice does the Minister suggest that we give those parents?

Mr. Waldegrave: I advise the hon. Gentleman to tell those parents that the £200 million that the university system will be saving during the next few years will make a significant contribution, for example, to the expansion of training for 16 to 19-year-olds, which arguably is an even higher priority.

Mr. Canavan: asked the Secretary of State for Education and Science whether he will arrange to meet the University Grants Committee to discuss the financing of universities.

Mr. Waldegrave: My right hon. Friend has frequent meetings with the chairman of the University Grants Committee, but has at present no plans to meet the committee formally.

Mr. Canavan: Is the Minister aware that there are 8, 000 applicants for only 600 places at the University of Stirling next year, yet the UGC is still hell-bent on imposing a 27 per cent. cut in student numbers and a 23 per cent. cut in recurrent grant? Will the Minister intervene now and give more money to the UGC to enable universities such as Stirling to take in more, not fewer, students? Or is it now official Government policy to throw more and more well-qualified young people on to the dole queue, instead of giving them a place in higher education?

Mr. Waldegrave: The hon. Gentleman knows that the policy of Her Majesty's Government remains that of their predecessor, which is that they will not intervene in specific recommendations of the UGC. That remains our policy.

Mr. Cyril Smith: Is the Minister aware of the fine relationship that exists between Lancaster university and the Edge Hill training college? Is he aware of the danger of the closure of the Edge Hill training college by the Lancashire county council? Has he any comment to make? If not, will he look into the matter, with a view to safeguarding the future of that fine training college?

Mr. Waldegrave: I visited Lancaster university and had an interesting discussion with staff there. I am not aware of the problem to which the hon. Gentleman refers, and I shall write to him about it.

Mr. McQuarrie: As my hon. Friend visited Aberdeen university recently, does he accept that, in view of the devastating effect that the UGC cuts will have on that university, it might be a good idea if he and his right hon. Friend met the chancellor again to see what can be done

about that important university, where oil and gas technology is being acquired by people who are bringing cash into the country?

Mr. Waldegrave: My hon. Friend exaggerates when he refers to the "devastating" of Aberdeen university. Aberdeen university is a fine university with a long tradition. It will complete its 500th anniversary, and I have no doubt that in due course it will complete its millennium. Any help that my hon. Friend can give in increasing the contribution made by local industry to that university, which undoubtedly is doing much for the oil industry and which in my view does not receive the support that it should from the oil industry, would, I am sure, be welcomed by the university.

Mr. Robert Hughes: Does the Under-Secretary recall from his visit the other day that the principal made it clear that the effect on Aberdeen will be serious, damaging to the career structure, and damaging to the university? Is he aware that there is great resentment in the university in that on 23 February it received a curt one-paragraph letter saying that nothing had changed, despite all the representations made to him and to the UGC? Does it not show that his visits to universities are a fatuous public relations exercise, costing a great deal of money, and to no purpose? Would it not be a service to universities if he resigned, instead of being the Secretary of State's poodle?

Mr. Waldegrave: I shall not take up the suggestion in the latter part of the hon. Gentleman's question. No one underestimates the problems that are being faced by Aberdeen university, but it has resources available to it that will enable it to solve those problems satisfactorily.

Mr. Nicholas Winterton: When my hon. Friend next meets the University Grants Committee, will he discuss with it the reduction in the number of degree courses for the clothing and textile industry, which is the second largest employer in the United Kingdom? With the closure of the courses at Bradford and the possible reduction in the courses at UMIST and Leeds, this industry is suffering. Bearing in mind that we need high technology courses in this industry, will he discuss this matter with the University Grants Committee?

Mr. Waldegrave: This subject is a classic example of one that is taught across the binary line, both in polytechnics and colleges, and in universities. We are now in a position to plan to concentrate resources on the necessary but relatively small subjects that he mentions, and I have no doubt that the national advisory board and the UGC will discuss textile and other clothing subjects.

Mr. Kinnock: Does the Under-Secretary accept that the contributions of the hon. Members for Macclesfield (Mr. Winterton) and for Aberdeenshire, East (Mr. McQuarrie) are only the latest in a series of plaintive cries from his right hon. and hon. Friends, and that it would be more honest for him to answer the question "Cannot something be done?" with the answer "No, Sir, there is nothing we will do, because we in the Conservative Party believe that there are too many degree-giving institutions open to too many people spending too much money, and we believe that they should be cut to a point where we restore the elitism of a previous generation"?

Mr. Waldegrave: The hon. Gentleman should remember that at the end of these cuts there will probably be more students in the system than there were during the last year of his Government.

Primary Schools (Pupil Costs)

Mr. Knox: asked the Secretary of State for Education and Science how much was spent per pupil in primary schools in England in real terms in the most recent year for which figures are available.

Sir Keith Joseph: Net institutional recurrent expenditure per primary pupil in England in 1980–81 was £547, the highest level ever recorded, both in cash and real terms.

Mr. Knox: Does my right hon. Friend agree that those figures show that the Opposition talk a great deal of nonsense when they talk about cuts in primary education expenditure?

Sir Keith Joseph: My hon. Friend is quite right, but we should remember that there are difficulties in schools, because falling rolls involve diseconomies of scale, and there is mismatch. We should not be euphoric, although we should always remember that in real terms there was a record level of expenditure per child in that year.

Mr. Dobson: As the Secretary of State has not communicated the information to his hon. Friend the Under-Secretary of State for Education and Science, the hon. Member for Brent, North (Dr. Boyson), will he tell the House when he intends to publish the report by Her Majesty's Inspectorate on education standards in schools in England and Wales?

Sir Keith Joseph: Although that is a different question, I am glad to repeat that I shall publish the report as soon as I receive it.

Sex Education

Mr. Stokes: asked the Secretary of State for Education and Science whether he is satisfied that there are sufficient legal safeguards to enable a parent to withdraw his child from sex education in schools if such education is contrary to that parent's philosophy.

Dr. Boyson: We have made it clear that there should be the fullest consultation and co-operation between schools and parents about the way in which sex education is provided.

Mr. Stokes: I thank my hon. Friend for that sensible reply. Is he aware that the sexual propaganda of organisations such as the Family Planning Association and the Brook Advisory Centres is considered by many people to be immoral and dangerous? Can parents be protected from it by having the right to take their children away from lessons if necessary?

Dr. Boyson: I accept that some of the material that has gone into schools would be repulsive to everyone in the House. Indeed, we asked for some to be taken away last year, and we are asking for more to be taken away now. The right of withdrawal from the class when sex education is taking place was considered. In the 1980 Act we said that every school would have to provide information on the way that sex education was taught. This must also be discussed with parents before being put into operation.

Mrs. Renée Short: Will the Minister reject the Neanderthal attitude of his hon. Friend? Of course it is a matter for parents. No one denies that. However, if they are not willing or able to take on that duty, does not the Minister think that there should be properly structured help from teachers, who are trained to provide this help at school? Will the Minister consider the matter carefully, because it is an urgent problem?

Dr. Boyson: I do not believe that we increase parents' responsibility by taking responsibility from them. Such education is the responsibility of parents. The problem in schools is how to teach sex education as a subject that teaches the children about personal responsibility for all relationships. Also, in schools, if the discovery method is taught the children will go out and use it.

Further and Higher Education

Mr. Spearing: asked the Secretary of State for Education and Science if he will take steps to ensure the continuation of part-time courses in further and higher education.

Mr. William Shelton: The Government recognise the importance of part-time provision in further and higher education in meeting the needs of individuals and of industry and commerce; and we would encourage the local education authorities and their institutions, whose responsibility this is, to continue to give prominence to such provision.

Mr. Spearing: Does the Minister agree that part-time courses for mature students in further and higher education are among the most cost-effective of education services, particularly when students, such as those at Birkbeck college, are paying the fees themselves? As such courses provide an efficient form of education and self-help, do not they go along with Government philosophy in both these respects? Therefore, why are those courses having to be cut?

Mr. Shelton: As I have already told the House, the provision for further education has been substantially increased. It is true that the number of part-time courses in non-advanced further education has reduced in contrast to full-time and sandwich courses. This is partly due to unemployment. However, I remind the hon. Gentleman that by 1984–85 there will be about 50, 000 places in UVP.

Mr. Whitehead: I think that we shall need a translation of those last remarks in the Official Report. Will the Minister undertake an inquiry into the full-time equivalent conversion factors involved in both sides of higher education, because there is a great deal of evidence that they militate against the way in which part-time and mature student courses are carried on in those institutions?

Mr. Shelton: I understand the point that the hon. Gentleman makes. As he knows, the conversion factor is based on an annual survey carried out by the Department. However, perhaps I can reassure the hon. Gentleman by saying that the newly established National Advisory Body for Local Authority Higher Education is setting up a working group to examine the data base for its work. The issue that the hon. Gentleman mentioned will be one of those studied.

Secondary Education (Manchester)

Mr. Marks: asked the Secretary of State for Education and Science when he expects to complete consultations on the Manchester local education authorities' revised proposals for secondary education; and if he will announce his decision in time for implementation in 1982.

Dr. Boyson: I wrote to the hon. Member on 10 March advising him that, immediately following the completion of consultations, my right hon. Friend the Secretary of State had approved Manchester's proposals.

Mr. Marks: I welcome the early announcement, which will enable changes to take place this year, although it is 14 months since Manchester submitted its application. Does the Minister agree that Manchester acted urgently and correctly in recognising the problem of falling school rolls? The Government have since told all local education authorities to do the same. What has been the response?

Dr. Boyson: I appreciate the hon. Gentleman's kind remarks about the early announcement. I should tell him that we had the new proposals for only about two weeks before we approved them. That is productivity of which the country can be proud. With regard to the rest of the country, the number of places taken out of use last year with Government approval was twice that of the previous year.

Mr. Silvester: What undertakings have been given by the Manchester city council to ensure that there is no bad effect arising from the city council's policies on the recruitment to the three excluded schools or on the careers structure of their staff?

Dr. Boyson: I am aware of my hon. Friend's concern about that matter. My right hon. Friend the Secretary of State met the Manchester education committee to discuss that matter and to ensure that there was no movement away of child population that would deprive the three retained sixth forms of their natural catchment. An assurance was given by the authority that that would not happen.

National Advisory Body for Local Authority Higher Education

Mr. Norman Hogg: asked the Secretary of State for Education and Science what arrangements are being made for representation of, and consultation with, non-teaching staffs and colleges and polytechnics by the new National Advisory Body for Local Authority Higher Education.

Mr. Waldegrave: The National Advisory Body for Local Authority Higher Education is in the process of constructing effective liaison machinery for those interest groups without direct representation on its board.

Mr. Hogg: Does the Minister appreciate that the composition of the board does not include the National and Local Government Officers Association, which has 10, 000 members in polytechnics and a large number of members in colleges? Will he take steps to ensure that non-teaching unions are represented?

Mr. Waldegrave: I am sure that the hon. Gentleman will be pleased to hear that the president of the union that

he mentioned, by which I believe the hon. Member is sponsored, has been invited to join one of the, working groups on the national advisory board.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Beith: asked the Prime Minister if she will list her official engagements for Tuesday 16 March.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the President of the Council of Ministers and the President of the Commission of the European Community. Later I was present at the arrival in London of His Majesty the Sultan of Oman. In addition to my duties in the House I shall be having further meetings later today. This evening I shall attend a State banquet given by Her Majesty the Queen in honour of the Sultan of Oman.

Mr. Beith: Will the Prime Minister find time today to read again the promise that was made to the House by the Secretary of State for Social Services two years ago to the effect the 5 per cent. abatement of unemployment benefit would end when that benefit was brought into tax? Is it not a gross breach of faith with the House and the unemployed that the Chancellor of the Exchequer now proposes not to give back that 5 per cent? Why should the unemployed, of all people, be subject to double taxation?

The Prime Minister: Final decisions on that matter have yet to be taken. If extra is to be found, it will probably come once again from the national insurance contributions.

Mr. Dover: Will my right hon. Friend accept that the key issue in the North-West of England at the moment is one of law and order? Will she be willing to break with tradition and allow another debate on capital punishment in the lifetime of this Parliament?

The Prime Minister: I accept that the question of law and order is one of those foremost in the public mind, and for good reasons. We have already had one debate on capital punishment. I would have considerable doubts about whether another one would produce a different result, but this is a question for my right hon. Friend the Leader of the House.

Mr. Foot: Does the right hon. Lady think that there is any connection between the record rates of crime and of unemployment that have come about under her Government?

The Prime Minister: No, Sir. There is not a direct relationship in any way. The right hon. Gentleman has only to look at the way in which the crime figures rose through periods of increasing prosperity and decreasing unemployment. They rose steadily. For obvious reasons, street crimes take place very much in the centres of our cities. Idle hands get to mischief. However, in my view that is not the reason for the sharp increase in crime.

Mr. Foot: Will the right hon. Lady apply her mind to what is likely to happen to crime and unemployment figures if the community enterprise programme of the Manpower Services Commission is cut by the Secretary of State for Employment? Does she not think that that could also contribute to crime and unemployment?

The Prime Minister: The community enterprise programme is being expanded by a further 5, 000 to 30, 000.

Mr. Edward Gardner: Does my right hon. Friend agree that her Government's policy of giving high priority to law and order has provided the police with the resources that they need to meet the present crime wave? Does she think that it would be timely if the police were to let it be known that they intend to make the fullest use of their new strength and that they will not be intimidated or deflected from their duties by any attempts to defame them as racist?

The Prime Minister: I agree with my hon. and learned Friend. The Government have increased the number of police by 8, 000 in England and Wales and ensured that they are properly paid and properly equipped. Those who undermine the police are those who attempt to brand them as racist or attempt to undermine them in other ways.

Mr. Straw: asked the Prime Minister if she will list her official engagements for 16 March.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Straw: Is the Prime Minister aware that last August, in explaining away his claim that the recession was ending, the Chancellor of the Exchequer defined the recession as a situation in which industrial output and production were falling? As industrial output and production have fallen for each of the past three months, is not the conclusion inescapable that the country is now in the grips of a renewed recession?

The Prime Minister: No, it is not. It is up over the low point of last year. The hon. Gentleman must wait for some more figures. The hon. Gentleman knows full well, and probably has read, some of the reasons that the Statistical Office gave in the press release for the figures. Yes, the figures were bad. Yes, there was an unprecedented period of bad weather at that time. Yes, there were many strikes. It is not those on the Government Benches who help to support strikes. I hope that we shall soon get some better figures. When we have them I shall be pleased, and doubtless Labour Members will be displeased.

Mr. Sainsbury: Will my right hon. Friend find time today to study the statement made by President Brezhnev about the deployment of SS20 missiles west of the Urals? Does she agree that the statement falls far short of what might be needed, in that it leaves available deployment east of the Urals that is just as dangerous and does not reduce the number of missiles to the west? Does my right hon. Friend accept that the statement is a nasty reminder to us all of the extent to which the Soviet Union has been increasing its deployment of nuclear missiles over the past three years?

The Prime Minister: Yes, I agree very much with my hon. Friend. President Brezhnev's statement ignores two facts. First, it freezes the total superiority of the Soviet Union in these weapons—

Mr. Cryer: No. The right hon. Lady is wrong.

The Prime Minister: It freezes the total superiority of the Soviet Union in these theatre nuclear weapons. Secondly, it ignores the fact that the SS20s can just as well be deployed and targeted on the United Kingdom and the rest of Europe from beyond the Urals as they can from this side of them.

Mr. Marks: Will the Prime Minister take time today to bear in mind that pensioners and others have lost two or three weeks' pension or benefit because of her Government's new calculation of benefits and their miscalculation of inflation? Will she compensate them for this amount by introducing an Easter bonus?

The Prime Minister: No. The hon. Gentleman talks of an Easter bonus. Under this Government the pensioners have had a bonus each Christmas, which they did not have under the Labour Government.

Mr. Alexander: Will my right hon. Friend take time in the course of today to note that since the Budget of my right hon. and learned Friend the Chancellor of the Exchequer both interest rates and building society rates have fallen and are likely to do so again soon?

Mr. Skinner: For how long?

Mr. Alexander: Is it in the remotest degree conceivable that that would have happened if, instead of my right hon. and learned Friend's Budget, we had had the £9, 000 million inflationary programme presented by the right hon. Member for Stepney and Poplar (Mr. Shore) a few days before?

The Prime Minister: Of course, in that case neither interest rates nor building society rates would have come down. What would have happened to the exchange rate I tremble to think. The inflation rate would have increased precisely as it did when the Labour Government inflated the economy. It went up to 26·9 per cent. under that Government. It would do so again and would go even higher if the right hon. Gentleman's programme were implemented.

Mr. Michael Martin: Is the Prime Minister aware that Imperial Tobacco Ltd. has announced 2, 500 redundancies throughout the United Kingdom? As the Exchequer has received so much finance from the tobacco industry, will the right hon. Lady ask her Ministers to consider the social consequences of the redundancies and make representations to Imperial Tobacco.

The Prime Minister: I can understand the hon. Gentleman's concern for those in his constituency who will be without work. I am sorry, but one cannot urge people to purchase more of the products associated with smoking tobacco. It is a matter of personal choice for the public. We shall have to see whether we can get alternative work for those who will be without work.

Sir Russell Fairgrieve: asked the Prime Minister if she will list her official engagements for 16 March.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Sir Russell Fairgrieve: Is my right hon. Friend aware that there is widespread support in Scotland for the decision that the United Kingdom should continue to maintain its own nuclear deterrent? Will she further accept that disarmament negotiations are better conducted from a position of military strength rather than military weakness?

The Prime Minister: I genuinely agree with what my hon. Friend has said. The Government, like their predecessor, of which the Leader of the Opposition and the right hon. Member for Bristol, South-East (Mr. Benn) were members, believe in keeping a nuclear deterrent as


a safeguard for our strength. We also believe that it is far better to negotiate for disarmament from a position of strength. I agree with my hon. Friend that we need to negotiate a position on disarmament. I hope to go to the opening part of the second UN special session in New York to make a contribution on behalf of the United Kingdom.

Mr. Urwin: Will the Prime Minister try to find a little time today to read and analyse the press reports of yesterday and today on the issue raised by the French on the development of a European independent defence policy? Is she prepared to subscribe to the belief expressed by President Mitterrand that the Western European Union provides a ready-made forum for the development of such a policy?

The Prime Minister: We should be very wary before we have in Europe a scheme that applies only to Europe, while at the same time we have the North Atlantic Treaty Organisation. It seems to me that that would not in the end unite the Western world in defending its own interests. It would have the possibility of dividing it, especially from its friends across the Atlantic, who are the ultimate guarantors of Europe's freedom.

Confederation of British Industry

Mr. McNally: asked the Prime Minister when she next intends to meet the Confederation of British Industry.

The Prime Minister: I have no immediate plans to do so.

Mr. McNally: When the Prime Minister meets the CBI, will she confirm that built into the Budget strategy is an increase in unemployment, especially youth unemployment, in the coming year?

The Prime Minister: That is not part of the Budget strategy. If the hon. Gentleman studies the forecast for the whole of Europe and for the OECD countries, he will find that there are forecasts of increasing unemployment across Europe and the OECD countries. Some of the forecasts were made before the recent fall in the price of oil, which one hopes will help to give a boost to international trade. I remind the hon. Gentleman that the CBI was warm in its praise of my right hon. and learned Friend's Budget.

Mr. Teddy Taylor: As rates are a major problem for British industry these days, will my right hon. Friend encourage the CBI to co-operate with local authorities in expanding privatisation, which in Southend has resulted in the borough reducing its rate last year and having no increase this year?

The Prime Minister: Yes, I shall certainly do so. I know that Southend enjoys most effective facilities, which are operated privately, at a considerably lower cost than was the case when they were operated by the local authority. Similar steps are now being taken in Eastbourne, which also expects to save a great deal of money, and in Wandsworth. They are all delighted with the results that they are seeing and I hope that more and more local authorities will do this for the benefit of their ratepayers and local industries.

Mr. Alexander W. Lyon: Does the Prime Minister recognise that in areas in which community policing has been tried it has proved to be a far more effective way of bringing down the crime rate? [Interruption.] In those circumstances—

Mr. Speaker: Order. This is not an open question. This question relates to the CBI. I shall call one more hon. Member.

Mr. Pavitt: When the Prime Minister next meets the CBI, will she discuss the possibility that companies that suffer economic difficulties because their products are harmful to health could show greater responsibility by following the example of Imperial Tobacco, which is diversifying by putting the majority of its capital into products other than cigarettes?

The Prime Minister: Yes. There was a time when diversification was all the fashion. A number of companies then found that they were not expert in the acquisitions that they made and so it ceased to be so much the fashion. I accept the underlying point that companies with a loyal work force should try to find work for that loyal work force by producing other goods for which there is a good market.

EUROPEAN COMMUNITY DOCUMENTS

Ordered, 
That European Community document No. 10852/81, concerning a proposal for the introduction of a tendering procedure for the granting of export refunds on certain milk products, be referred to a Standing Committee on European Community Documents.—[Mr. Pym.]

BUSINESS OF THE HOUSE

Ordered, 
That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund (No. 2) Bill may be proceeded with at this day's sitting.—[Mr. Thompson.]

British Railways (Divestment of Assets)

Mr. John Farr: I beg to move,
That leave be given to bring in a Bill to provide for the sale of the ancillary assets of British Railways.
My proposed Bill has a fivefold effect on Britsh Railways. I have been encouraged to promote it by my constituents. They have been exasperated, as have I, by the recent ASLEF strike which cost the British Railways Board about £100 million, comprising about £75 million from lost revenue and about £25 million in paying non-ASLEF employees. Either the taxpayer or the British Railways Board must foot the bill.
My constituents and I strongly object to paying one penny of the cost of that strike, especially as its sole purpose was to preserve an archaic rostering system. It has been estimated that if the flexible rostering is introduced British Rail's productivity will be boosted by 6 per cent.
The House may be interested to hear that in the past six years British Rail's productivity has increased by only 1½ per cent., or about 0·25 per cent. per annum. That compares with a lift of no less than 35 per cent. in productivity resulting from the Beeching axe.
My Bill requires the British Railways Board to divest itself of some of the assets with which I shall deal in a moment. The Bill requires it to get out of property, catering, hotels and shipping businesses and to concentrate on the single purpose of an efficiently run rail network. I am well aware that the provisions of the 1962, 1968 and 1981 Transport Acts enable the board to exercise its powers of disposal. I am sure that my right hon. Friend the Secretary of State for Transport is urgently examining that aspect now.
Since the Transport Act 1981, the economic position of the railways has dramatically worsened. Once again, the long-suffering taxpayer must pick up the bill. My proposals reflect what I believe is a widespread view both in the House and in the country today. They require, first, the disposal of British Rail's 26 railway hotels, secondly the disposal of its 30 Sealink ships as soon as possible to the highest bidders, and, thirdly, the selling of the 13 railway workshops, which employ about 39, 500 people.
The workshops are grouped together under British Rail Engineering and enjoy a monopoly of British Rail business while private wagon builders such as the Standard Railway Wagon Company of Stockport are not allowed to compete. British Rail Engineering has existed for 12 years and, despite having the monopoly of British Rail supply, its export efforts have been meagre. According to the latest available figures, it has succeeded in supplying less than 1·3 per cent. of the world rail equipment market. Fourthly, the Bill would enable private caterers to operate the restaurant car service and cafeterias on British Rail stations.
I turn now to what I believe will be a new lease of life for the branch lines. British Rail currently operates about 20, 000 miles of track, and I understand from recent reports that it is threatening to close 3, 000 miles of it unless the Government inject more than £700 million. That is an outrageous view. Every mile of permanent way left after Beeching is a national asset.
The Bill would set up a holding authority which would take over one-third, or about 7, 000 miles, of track at once, with the duty to dispose of those lines to local consortia

of business men, local industrialists, and hotel and tourist interests. For example, a consortium could be formed to take over its own branch line, often with local authority or tourist boared participation, or, in Scotland, with the participation of the Highlands and Islands Development Board.
The lines would not necessarily be profitable as a result of such consortia, but at least they would serve local needs. With local knowledge, business acumen and enthusiasm, I believe that they would gain a new lease of life. That would be of local benefit. It would also benefit British Rail, to which those lines are now a financial burden.
The House may be interested to know that that system has been tried successfully abroad, notably in Switzerland where State-owned and independent operators exist and work in harmony. Too often rural railways are operated as sleepy backwaters and no attempt is made to win and develop new business, especially freight traffic. In some cases, there is little effort to make worthwhile and possible economies.
If the House accepts my Bill, British Rail will be left with a much slimmed down operation and will be able to concentrate its efforts on providing the nation with an efficient inter-city network into the 1990s and beyond.

Mr. Speaker: I understand that the hon. Member for West Bromwich, East (Mr. Snape) wishes to oppose the Bill.

Mr. Peter Snape: As a member of the National Union of Railwaymen, I urge the House to oppose this in my view unnecessary but in some ways fascinating proposed Bill.
The most fascinating idea that the hon. Member for Harborough (Mr. Farr) has put forward is the proposal for private management of British Rail rural services. That prescription for British Rail's ills involves one minor fly in the ointment. Who will buy them? Among the famous 40 branch lines so often cited by Government supporters as ripe for closure, the ratio of costs to earnings is approximately 2·5 to 1. What private company—if there are any left after the Government's ravages—would want to take on that prospect?
The hon. Gentleman suggested the formation of little consortia involving local authorities. In 1982–83, the shire counties of England—the hon. Gentleman's constituency is smack in the middle of one—will contribute less than £500, 000 of the countrywide total towards British rail support out of a total current expenditure of £575 million on transport provision. That is less than one-tenth of 1 per cent. There is not a shred of evidence that councils in the sort of area represented by the hon. Gentleman will be willing to spend more—or indeed anything in the case of his own area—on local rail services. They will certainly not be encouraged to do so by the Secretary of State for the Environment who, had he been here, would no doubt have been very cross to hear the hon. Gentleman's proposing even greater local government expenditure. That is why it is necessary now, as always, for the Government to support these services through the public service obligation grant.
If the Bill were accepted, there would be no future at all for stations such as Melton Mowbray, Narborough or Oakham, in the hon. Gentleman's own county. On the


other side of the country, on the branch line between Stourbridge junction and Stourbridge town, the total costs recovered by British Rail from the travelling public is less than one-sixth of the overall cost of running the line. Despite the rush of tourists every year to see the birthplace of the immortal bard, the line between Stratford-upon-Avon and Leamington recovers less than half its total cost through passenger use. Returning to the hon. Gentleman's part of the world, the local service between Leicester and Derby, which includes Market Harborough station in the hon. Gentleman's constituency, covers less than half its total cost. Is the hon. Gentleman therefore proposing that his own local railway station should be closed? That would certainly be the effect of his bill.
The hon. Gentleman cited the precedent of Switzerland. He has a point, as, in addition to making excellent clocks and watches and banking everybody else's money, the Swiss are extremely good at subsidising their railway services. Their financial contribution to the running of the federal railways is currently four times greater than that of any Government in this country in the past 20 years. That is perhaps the only precedent that the Government would be wise to follow.
If the hon. Gentleman were proposing the doubling of investment in the railways, I should not hesitate to urge my hon. Friends to vote for the Bill. On the contrary, however, the underlying purpose of the Bill is to add to the pressure on British Rail to dispose of its saleable assets as quickly as possible. The more the price can be knocked down, the better for the Government's paymasters in the City of London. The British Railways Board has been increasingly starved of adequate investment by successive Governments, and the pressure for quick sales since the Conservatives took office has steadily mounted.
In the past 10 years, land sales by British Rail have totalled well over £200 million. In 1980 alone, land sales by the British Rail Property Board amounted to £40 million. The property board's total contribution to the main British Rail business was £67 million, and it will be much the same in 1981. The properties owned by British Rail constitute an asset which, if carefully developed and disposed of at the right time and in the right conditions, can make a long-term contribution to railway finances, but if the Government maintain their present posture of blackmail on the British Railways Board there will be continued distress selling of the assets on a massive scale. What a way to run a railway!
Sheer financial necessity is only one barrel of the shotgun that the Government are now holding to British Rail's head. The board is already under statutory notice to sell off its hotel and shipping interests. No doubt the hon. Member for Harborough was suitably upset when the Monopolies and Mergers Commission turned down the fairly recent attempt by his hon. Friend the Member for Dorking (Mr. Wickenden) to take over Sealink. No doubt he would have been only too happy to see that national asset carved up by European Ferries, which in the past decade has not bought one British ship or paid one penny in United Kingdom tax.
The enforced sale of British Rail ships, hotels, land and—if we are to believe what we have heard—even branch lines is still not enough for the hon. Gentleman. He wishes railway workshops and catering also to come under the auctioneer's hammer. His comments about the workshops' export record are an insult to hard-working men in towns such as Swindon, York and Doncaster which

for more than 100 years have set an example to the world in railway craftsmanship and exports. For the hon. Gentleman, from the exile of his farms in this country and overseas, to attack working men in railway factories in this country is nothing short of an insult.
A valued amenity for rail passengers which is unique in Europe in its range of services but not very profitable, as Pullman discovered a long time ago, is British Rail catering—Travellers' Fare. We can all imagine the type of company that would wish to take over Travellers' Fare at a knockdown price. They would be companies such as Trust Houses Forte and Granada which now ply their wares, if that is the right expression, on Britain's motorways. I can only suggest that any hon. Member wishing to avail himself of their facilities should take a full wallet and plenty of indigestion tablets, as in terms of price and quality those companies have a great deal to learn from the likes of Travellers' Fare.
The hon. Member for Harborough provided us with an entertaining few minutes, but if the Bill were accepted, who would be responsible for the sale of those national assets? It could scarcely be the Secretary of State for Transport, whose lugubrious face looks at us across the Dispatch Box about once a month. No matter how desperate we were, we should be hard put to consider buying a clapped-out diesel multiple unit from him. Perhaps it would be the Secretary of State for Energy, who represents the nearby constituency of Blaby—the man who gave us, or perhaps the City, Amersham International.
The Bill is nonsense. I hope that my right hon. and hon. Friends, and indeed Conservative Members who take the time and trouble actually to read it, will join me in voting against it.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 152, Noes 166.

Division No. 92]
[3.50 pm


AYES


Alexander, Richard
Clarke, Kenneth(Rushcliffe)


Atkins, Robert(PrestonN)
Cockeram, Eric


Baker, Kenneth(St. M'bone)
Colvin, Michael


Baker, Nicholas(N Dorset)
Cope, John


Banks, Robert
Corrie, John


Beaumont-Dark, Anthony
Dickens, Geoffrey


Bennett, Sir Frederic(T'bay)
Douglas-Hamilton, LordJ.


Berry, Hon Anthony
Dover, Denshore


Best, Keith
Dunn, Robert(Dartford)


Bevan, DavidGilroy
Elliott, SirWilliam


Biggs-Davison, SirJohn
Eyre, Reginald


Blackburn, John
Fairgrieve, SirRussell


Boscawen, HonRobert
Faith, MrsSheila


Bottomley, Peter(W'wich W)
Farr, John


Bright, Graham
Fenner, Mrs Peggy


Brinton, Tim
Finsberg, Geoffrey


Brooke, Hon Peter
Fookes, Miss Janet


Browne, John(Winchester)
Forman, Nigel


Bruce-Gardyne, John
Fox, Marcus


Bryan, Sir Paul
Fraser, Peter (South Angus)


Buck, Antony
Gardiner, George(Reigate)


Budgen.Nick
Garel-Jones, Tristan


Butcher, John
Glyn, Dr Alan


Cadbury, Jocelyn
Goodhew.SirVictor


Carlisle, John(Luton West)
Goodlad.Alastair


Carlisle, Kenneth(Lincoln)
Gorst.John


Carlisle, Rt Hon M.(R'c'n)
Grant, Anthony (Harrow C)


Chalker, Mrs. Lynda
Gray, Hamish


Chapman, Sydney
Greenway, Harry


Clark, Hon A.(Plym'th, S'n)
Griffiths, Peter Portsm'th N)


Clark, Sir W.(Croydon S)
Grist, Ian






Gummer, JohnSelwyn
Price, Sir David (Eastleigh)


Hamilton, Hon A, 
Proctor, K, Harvey


Hamilton, Michael(Salisbury)
Pym, Rt Hon Francis


Hawkins, Paul
Raison, Rt Hon Timothy


Heddle, John
Rathbone, Tim


Henderson, Barry
Rhodes James, Robert


Higgins, Rt Hon Terence L
Rifkind, Malcolm


Holland, Philip (Carlton)
Ross, Wm, (Londonderry)


Hooson, Tom
Rossi, Hugh


Hordern, Peter
Rost, Peter


Hunt, David (Wirral)
Shaw, Michael(Scarborough)


Hunt, John(Ravensbourne)
Shepherd, Colin(Hereford)


JohnsonSmith, Geoffrey
Shepherd, Richard


Jopling, RtHonMichael
Silvester, Fred


Kaberry, SirDonald
Smith, Dudley


Kilfedder, JamesA, 
Smyth, Rev. W. M. (Belfast S)


Kimball, SirMarcus
Spence, John


Knight, MrsJill
Spicer, Jim (West Dorset)


Langford-Holt, SirJohn
Stainton, Keith


Lawrence, Ivan
Stanbrook, Ivor


Lee, John
Stanley, John


Lennox-Boyd, HonMark
Stevens, Martin


Lewis, Kenneth(Rutland)
Stewart, Ian(Hitchin)


Lloyd, Peter(Fareham)
Stradling Thomas, J.


McCrindle, Robert
Taylor, Teddy (S'end E)


Macfarlane, Neil
Tebbit, Rt Hon Norman


MacGregor, John
Temple-Morris, Peter


Marlow, Antony
Thomas, Rt Hon Peter


Marshall, Michael(Arundel)
Thompson, Donald


Marten, Rt Hon Neil
Thornton, Malcolm


Mather, Carol
Townend, John (Bridlington)


Mawby, Ray
Trotter, Neville


Mills, Iain(Meriden)
Viggers, Peter


Moate, Roger
Waddington, David


Molyneaux, James
Walker, B. (Perth)


Morris, M. (N'hamptonS)
Wall, SirPatrick


Mudd, David
Walters, Dennis


Murphy, Christopher
Ward, John


Neale, Gerrard
Warren, Kenneth


Nelson, Anthony
Wheeler, John


Neubert, Michael
Wilkinson, John


Onslow, Cranley
Winterton, Nicholas


Page, John (Harrow, West)
Wolfson, Mark


Page, Richard (SW Herts)



Parris, Matthew
Tellers for the Ayes:


Powell, Rt Hon J.E. (S Down)
Mr. David Myles and


Prentice, Rt Hon Reg
Mr. James Pawsey.




NOES


Adams, Allen
Campbell-Savours, Dale


Allaun, Frank
Canavan, Dennis


Alton, David
Carter-Jones, Lewis


Archer, Rt Hon Peter
Cartwright, John


Ashton, Joe
Clark, Dr David (S Shields)


Atkinson, N. (H'gey, )
Cocks, Rt Hon M.(B'stol S)


Bagier, Gordon A.T.
Coleman, Donald


Barnett, Guy(Greenwich)
Concannon, Rt Hon J. D.


Barnett, Rt Hon Joel (H'wd)
Conlan, Bernard


Beith, A.J.
Cook, Robin F.


Bennett, Andrew(St'Kp'tN)
Cowans, Harry


Bidwell, Sydney
Cox, T. (W'dsw'th, Toot'g)


Boothroyd, MissBetty
Craigen, J. M. (G'gow, M'hill)


Bradley, Tom
Crowther, Stan


Bray, Dr Jeremy
Cryer, Bob


Brown, Hugh D. (Provan)
Cunliffe, Lawrence


Brown, R. C. (N'castle W)
Dalyell, Tam


Buchan, Norman
Davis, Terry (B'ham, Stechf'd)


Callaghan, Jim(Midd't'n&amp;P)
Deakins, Eric




Dean, Joseph (Leeds West)
Morris, Rt Hon J. (Aberavon)


Dixon, Donald
Morton, George


Dobson, Frank
Mulley, RtHonFrederick


Douglas, Dick
Oakes, Rt Hon Gordon


Dubs, Alfred
O'Halloran, Michael


Duffy, A. E. P.
O'Neill, Martin


Eadie, Alex
Orme, RtHon Stanley


Eastham, Ken
Palmer, Arthur


Edwards, R. (W'hampt'n S E)
Park, George


Ellis, R.(NE D'bysh're)
Parry, Robert


English, Michael
Pavitt, Laurie


Evans, Ioan (Aberdare)
Pitt, WilliamHenry


Evans, John (Newton)
Powell, Raymond (Ogmore)


Flannery, Martin
Price, C. (Lewisham W)


Fletcher, Ted (Darlington)
Radice, Giles


Foot, Rt Hon Michael
Rees, Rt Hon M (Leeds S)


Ford, Ben
Roberts, Gwilym(Cannock)


Forrester, John
Robinson, G. (Coventry NW)


Foulkes, George
Rooker, J. W.


Freeson, RtHon Reginald
Roper, John


George, Bruce
Ross, Ernest (Dundee West)


Golding, John
Sandelson, Neville


Graham, Ted
Sheerman, Barry


Hamilton, James(Bothwell)
Sheldon, RtHon R.


Hamilton, W. W. (C'tral Fife)
Shore, Rt Hon Peter


Harrison, Rt Hon Walter
Short, Mrs Renée


Haynes, Frank
Silkin, RtHon J. (Deptford)


Hogg, N. (EDunb't'nshire)
Silverman, Julius


Homewood, William
Skinner, Dennis


Hooley, Frank
Smith, Cyril(Rochdale)


Howells, Geraint
Smith, Rt Hon J. (N Lanark)


Huckfield, Les
Snape, Peter


Hughes, Mark(Durham)
Soley, Clive


Hughes, Robert (Aberdeen N)
Spearing, Nigel


Hughes, Roy (Newport)
Spriggs, Leslie


Jay, Rt Hon Douglas
Steel, Rt Hon David


John, Brynmor
Stewart, Rt Hon D. (W Isles)


Johnson, James (Hull West)
Stoddart, David


Johnson, Walter (Derby S)
Stott, Roger


Jones, Dan (Burnley)
Strang, Gavin


Kaufman, Rt Hon Gerald
Straw, Jack


Kerr, Russell
Taylor, Mrs Ann (Bolton W)


Kilroy-Silk, Robert
Thomas, DrR.(Carmarthen)


Lambie, David
Thorne, Stan(PrestonSouth)


Lamond, James
Tilley, John


Leighton, Ronald
Torney, Tom


Lestor, MissJoan
Urwin, RtHon Tom


Lewis, Ron (Carlisle)
Varley, Rt Hon Eric G.


Litherland, Robert
Wainwright, E.(Dearne V)


Lyons, Edward (Bradf'd W)
Wainwright, R.(Colne V)


McCartney, Hugh
Walker, Rt Hon H.(D'caster)


McElhone, Frank
Watkins, David


McGuire, Michael(Ince)
Welsh, Michael


McKay, Allen(Penistone)
White, Frank R.


McNally, Thomas
Whitehead, Phillip


McNamara, Kevin
Whitlock, William


McTaggart, Robert
Williams, Rt Hon A.(S'sea W)


Marshall, D(G'gowS'ton)
Wilson, Gordon (DundeeE)


Marshall, DrEdmund (Goole)
Winnick, David


Martin, M(G'gowS'burn)
Woodall, Alec


Maxton, John
Woolmer, Kenneth


Meacher, Michael
Young, David (Bolton E)


Mikardo, Ian



Millan, RtHon Bruce
Tellers for the Noes:


Miller, Dr M.S. (E Kilbride)
Mr. John Home Robertson and


Morris, Rt Hon C. (O'shaw)
Mr. A. W. Stallard.

Question accordingly negatived.

Orders of the Day — Consolidated Fund (No. 2) Bill

Order for Second Reading read.

Motion made, and Question proposed,  That the Bill be now read a Second time.

Orders of the Day — Overseas Aid

4 pm

Mr. Ben Ford: I am remarkably fortunate to have caught your eye, Mr. Speaker, so early in the afternoon and I am most grateful to you. I am delighted to see the Minister in his place, as I spent my first overseas visit in his company many years ago, soon after becoming a Member of Parliament. Therefore, we have had a common interest for many years.
The lines of the debate are fairly narrowly drawn, but I shall attempt to remain in order and to be relatively brief. We are talking about the technical assistance contained in overseas aid and about the provision of a small increase in the Supply Estimates for 1981–82, Class II, Vote 10. I wish that the increase had been greater. Perhaps it is time that we told the Government that such work is much more important for the peace and future harmony of the world than grandiose defence schemes.
By the same token, we should tell those whom we represent that it may well be necessary to make some further sacrifices in the name of humanity to succour some of the starving millions in the world. Poverty is comparative and from my experience I know that, despite all Britain's difficulties and misfortunes, the worst off person here lives in luxury compared with many millions of our fellow human beings. Increases in technical assistance will enable us to give more employment to our technicians, graduates and skilled men.
I visited Indonesia and travelled across the island of Java to the east, to the town of Surubaya. Java is vastly over-populated and that is an enormous problem. In Surubaya, I met a young British traffic engineer, who had devised a system to enable the maintenance of traffic flows in that over-crowded city. Hon Members may say that there is nothing remarkable about that, but in devising his scheme he took account of the bicycle rickshaws which, it had been discovered, were a major contributor to the town's economy. He had devised a remarkable scheme to enable buses, cars, mopeds and rickshaws to circulate in Surubaya without any traffic jams. I heard that engineer being congratulated by technicians of all nationalities.
During the same visit I saw teams of British technicians drilling wells to provide water supplies for the teeming millions on Java and other populated islands. I also remember when, following a visit to the West Indies, the Minister was responsible for technical aid being given towards the provision of an airfield and towards breeding stock to improve the cattle herds. I have perused House of Commons paper No. 183, the fourth report of the Public Accounts Committee. It is concerned with the Overseas Development Administration. It contains some excellent examples of bilateral technical co-operation, such as the Falkland islands airfield, hospital equipment for

Colombia, the Indian farmers' fertiliser project and the Wadi Dhuleil settlement project in Jordon. I should like many more projects to be set in train.
In addition to providing employment for more of our skilled and technically trained personnel, some of the increases in the provision for technical assistance should be used to purchase British equipment. For example, in my constituency there is an International Harvesters tractor factory. For several years it has suffered redundancies and short-time working. Is that not scandalous when much of the world cries out for increased food production? Would it not be only common sense to put men to work in Britain, manufacturing British equipment for the use of those overseas, so that they can be provided with food and decent standards of living? If we did that, we would derive economic benefits and at the same time a fund of good will towards us would be built up throughout the world.
In a memorandum to the Organisation for Economic Co-operation and Development in 1981, the Overseas Development Administration states that technical assistance and co-operation represent about one third of our bilateral programmme. I should like to see that percentage increased to 50 or 60 per cent. There is some evidence 'that direct cash aid does not always benefit those for whom it is intended. Apart from the fact that it might go astray, it is sometimes used to purchase guns instead of butter. Aid in kind sometimes runs into difficulties of all kinds, particularly when it comes to distribution to the right points.
I am pleased to note that in the ODA memorandum, the Government state that they intend to restore the number of new awards to the 1978 and 1979 levels. That is still not good enough. Much more should be done for overseas students. When educated here, they become accustomed to using British equipment and they almost invariably—on return to their own countries—order British equipment. Overseas students are a great investment.
Therefore, subject to my earlier remarks, I welcome the increase in the provision of technical assistance and. I hope that I shall be in a position to laud the Government more lavishly on this matter in a year's time. Whatever our problems may be, we as an industrialised country still have a duty to help suffering humanity.

Mr. Reg Prentice: I shall speak briefly in support of the hon. Member for Bradford, North (Mr. Ford). I do not know whether I shall do him a service by saying so, but I hope that if the hon. Gentleman's part of Bradford is to be represented by a Labour Member, it will be represented by him and not by the alternative about whom we have read.
I am glad that we have another debate on the aid programme. It was discussed several weeks ago on a Supply day and at that time I ventured to criticise the Government because their cuts were disproportionate. I cannot advance my argument without straying out of order, but I remind the House that although most Conservative Members were prepared to see reductions in some aspects of public expenditure, the reductions in the aid programme were disproportionate; they should be restored.
Within that programme we are discussing the technical assistance element. When the hon. Member says that this is probably the most valuable part of the programme he is correct. That is not in any way under-estimating the value


of the whole programme. He suggested that sometimes money provided in the form of capital aid programmes may go astray. This was not my experience when I was at the Ministry of Overseas Development, and I do not think that it is the current experience either. It may have been so some years ago, but the aid administrators of this and other donor countries have learnt the lessons of the past; they have learnt to avoid those sectors which are inefficient or corrupt, and they generally ensure that public money used in all aid programmes is used wisely.
I agree that the technical assistance programme is of particular value because we are generally dealing with a person-to-person relationship in one form or another. On the one hand we are talking about people who are brought to this country for training, which can vary from a higher degree course to a police officer being on a six-week attachment to a police force. There are courses of all shapes and sizes which dovetail with the development needs of the recipient countries.
On the other hand, technical assistance can mean British people going into developing countries both to do a job of work and to train someone local to carry on afterwards. In other words, it is part of the job to work oneself out of it and to pass on the skills. Therefore the nature of the programme has changed over the years. In many countries in Africa this is true. I have not seen any recent figures but I would have thought that we were providing fewer teachers for schools than we were, say, 15 years ago. In the intervening period many of these countries have trained large numbers of teachers, but they may still need from Britain teachers in certain subjects, and they may still need us to provide various kinds of teacher training for them.
I agree also with what the hon. Member said about a trade spin-off, particularly from technical assistance. That is something that one can never measure. The case cannot be proved by figures. Again, there are two aspects. If someone comes from Africa or from Southern Asia into Britain to do a course relating to a trade or profession and goes back home in a management position, he is more likely to buy British if he is responsible for ordering goods because of what he learnt when in this country.
Equally, if someone from Britain has gone to a developing country and passed on skills, there will be a spin-off in terms of future trade and orders. It illustrates the general point that the aid programme as a whole and technical assistance in particular is right both on moral grounds and in terms of long-term self interest. That is why many hon. Members on both sides of the House will watch the future size of the aid programme closely. We hope it will not be further cut and that it can be increased.
Members of the Select Committee on Foreign Affairs recently visited the Caribbean. When they returned one of the things they said was that there was a need for a greater aid effort both from Britain and from other Western countries in the Caribbean region, again both to try to help the poor and hungry, and also for political and foreign policy reasons.

Mr. George Foulkes: The right hon. Member may be aware that I was one of the people on that visit. May I assure him that he is right? What we saw was that much of the vacuum that has been left by the United Kingdom's withdrawal, particularly in training overseas

students, is being taken up by Cuba, which is providing free scholarships to Commonwealth students from all over the Caribbean. It seems strange that Conservative Government policy is resulting in this.
Incidentally, may I mention to the Minister that I am the Member for South Ayrshire? When he goes to Jersey again he may recall that I have made this intervention.

Mr. Prentice: I am grateful for that intervention. I was about to come to the end of my remarks. It often happens in this House that hon. Members on both sides become familar with the situation in a certain place, in this case the Caribbean. Another instance that comes to my mind is that when Zimbabwe became independent there were many demands from both sides of the House for a considerable aid programme for that country. I merely remind hon. Members that it is no good asking for aid in particular and then cutting the aid budget in general. The budget must be able to cope with specific situations which may well grow around the world. There may be strong foreign policy reasons why the West should want to help its friends in many parts of the world. That reinforces the other more general arguments that are always advanced on this matter.

Mr. James Johnson: I wish to draw the Minister's attention to a special and small item in this totality of aid. It is item B11 at the bottom of page 15 of the Supply Estimates, and is headed "Action Aid Somalia", where we make provision for £125, 000. I hope that the first instalment will be paid immediately, or in the very near future, because, if there is any place that needs aid, it is Somalia. I am delighted that we are for the first time providing this aid.
Many hon. Members, including the Minister and myself, have visited the refugee camps, and we think that we know the situation. Statistics are often misleading, but when one divides £125, 000 by 1 million, which is the number of refugees in the camps, that means little more than 10p for each poor devil, male, female or child. I make this appeal personally, because the Somalis are a noble and dignified people.
We administered the northern sector, the old protectorate, until quite recently. I can think of no other part of the former so-called Empire that has had a worse deal. We have left these people almost alone. They are being ravaged by the Ethiopians, who have pushed them out of places like Jijiga and the Ogaden. The Ethiopians have used Soviet and Cuban aid, helicopter gunships and any other weapons to pin down these men, women and youngsters and evict them from their homeland, the Ogaden, where so many ancestors of today's leaders lived.
There may be 1 million or 1½ million people in these camps. In some of the camps that I have visited, the provision is 2 litres of water per person per day, when the ration is 6 litres. In my constituency, West Hull, or the Minister's constituency, Banbury, the people have at least 16 litres per head per day. This is a measure of the distress of the refugees.
I do not wish to make a long speech, because, after being in the House for some years, I believe that shorter appeals, if they are sincere and factual, are much more valuable to a Minister than long-winded speeches with enormous quotations from texts of North American or other origin.
I am grateful for the small mercies that the Somali people have received. Although I have said that statistics are unreliable, there is no doubt that the numbers of displaced people on the brink of starvation are, if not more than the figure I have given, rising significantly. It is possible that in Somalia one person in four is a refugee. That statistic sums up the distress and horror of the position.
No one appreciates more than I the work being done in the United Kingdom by, among others, the Red Cross, CAFOD, Christian Aid, Oxfam and the Save the Children Fund. One could go on with a long catalogue of fine men and women who are devoting not only their spare time but sometimes their full time to getting help, succour and sustenance to the poor refugees not only in Somalia but next door in Ethiopia.
Politically, it would be helpful if the Government took a little more interest. I am speaking not about the Minister for Overseas Development, but about those Ministers who go to EEC meetings. Less than a fortnight ago I told the Lord Privy Seal that with EEC money given for aid in Ethiopia the Ethiopian Government—Mengistu and his allies—were moving Ethiopian peasants into lands which the poor refugees had left. They are settling them there with the aid of money which is partly our contribution to EEC funds. Once Ethiopian peasants have been settled on the land for five, eight, 10 years or more they will be dug in, and it will be heaven's own task to shift them.
In view of the latitude given to the Ethiopians, I cannot see that the Somali people will have a fair deal and return to their ancient homelands, where the poets and historians were. People living in Hargeisa and Mogadishu, men in the Cabinet and the Army, have gone all the way down there.
The refugees, whose ancestors lived in those parts, are not receiving sufficient help. It is the fault not of the Minister—I know how hard he works—but of his Cabinet colleagues who are making decisions. More money should be voted for aid to the people in question. We owe it to them. We administered the territory, and there is a legacy of our administration. We were there in the days of Churchill and Bevin after the war. The people in question expected a better deal. God knows how we are to get them back into the Ogaden. At least one in four is a refugee in his own territory in a political sense.
Our Government have given £125, 000. I wish that they would give £1 million. Nowhere in Africa have I seen more destitution, misery, distress and starvation than in the camps in Somalia.

Mr. Ivor Stanbrook: I am very grateful to the hon. Member for Bradford, North (Mr. Ford) for initiating this debate. I wish to take the opportunity to point to a difficulty facing universities in their attempts to provide overseas aid and especially technical co-operation through our overseas aid programme. I do so using the illustration of a college of the university of London which I attended immediately after the war before I joined the Colonial Service, the School of Oriental and African Studies, where I was taught the lingua franca of West Africa—Hausa. They taught me so well that 22 years after 1 last saw Nigeria I still speak that language fairly fluently.

Mr. Foulkes: It is no wonder that we do not understand the hon. Gentleman.

Mr. Stanbrook: I speak English most of the time. Such expertise as I have described is of great value.
The criteria of "development" for the purposes of our overseas aid policy have caused many difficulties for such institutions as the School of Oriental and African Studies in striving to provide the sort of technical assistance for which the extra money that we are speaking of is required. The main discouragement to the work done by the school, in maintaining British contacts with the Third world, arises from successive impediments to the free flow of postgraduate research students in the arts, law and the social sciences.
First, the Overseas Development Administration cuts off help to British teachers of those subjects in overseas universities. Then it excludes those subjects from the scope of most of the scholarship awards which it administers directly or through the British Council. Simultaneously, the Department of Education and Science, through the University Grants Committee, forces universities to raise all fees to a level about five times the average of those paid in other European countries, and those for overseas students to a level 10 to 15 times higher than those paid in the rest of Europe. The £5 million a year offered for competitive research scholarships for overseas students, given to offset this, is of little use to Third world students, since the amount covers only the difference between full-cost and home fees, and they cannot begin to afford the home fees.
We can see the result in the experience of the School of Oriental and African Studies, where the department of history, which 10 years ago had 160 research students, two thirds of them from overseas, today has only 47, less than half of them from overseas. That department's international contribution has been reduced by about two thirds.
As previous speakers have emphasised, the result of all this is that British influence has been dwindling in Africa for want of a proper appreciation of the role that could be played by the universities, and especially those bodies, such as the school, which are in direct contact with overseas students and overseas institutions.
France, among other countries, makes no such error. It is fully aware of the value of training overseas students in the metropolitan country and sending them back to their own homes, where they pay great dividends on the investment that the French Government have made in them.
It is important to emphasise the stultifying effect of the doctrine of providing more help for the poorest. The result of this doctrine is that aid is given for subjects and projects defined as "developmental" such as agriculture, rather than for languages, law and the history of the Third world.
Professor Roland Oliver of the school wrote a letter to the Daily Telegraph on 19 May 1979 in which he made that point particularly clear. In the latter part he said:
As the head of a university department concerned specifically with Asian and African history, I am approached almost weekly for help in finding British teachers urgently needed to fill key positions in Third World universities—often in cases where a national of the country has been seconded for important services in government—and I have had to reply that, although good candidates often exist in Britain their salaries will not be supplemented by the Ministry of Overseas Development, and therefore the replacement will probably have to be sought from another country with a different educational tradition.
As I know from regular experience in another context, the same narrow and materialistic criterion is even applied to


political refugees from the Third World who are granted asylum in this country. Either they must study an approved 'developmental' subject or they must rot on Social Security.
It is this kind of pedantry that we might now with advantage get rid of. The sums of public money involved are large—in scholarships alone, they are running up to towards £200 million a year. 
One wonders how many taxpayers wish their contributions to be limited to subjects deemed by a Whitehall adviser to be 'developmental', and how many of them regard the promotion of the English language and the traditional subjects of a liberal education as undesirable manifestations of 'cultural imperialism'.
As many of us think, we have a not altogether discreditable educational record in the Third World. Why should we not help these countries to build on the educational foundations already laid there, as the French do with such obvious success?
The 'developmental lobby' has made many useful contributions to our aid programme, but its increasingly monopolistic grip over Whitehall should now be loosened.
I believe that hon. Members will agree that Professor Oliver makes a powerful point, especially when one considers the value of the school. It has a staff of about 200 specialists in Oriental and African languages, history, law, geography, anthropology, politics and economics. It does not deal with agriculture, the obvious "development" subject in terms of the current definition of development.
The school has about 450 postgraduate students, 300 of them from overseas mainly from Third world countries. Its staff play a unique part in training the future staff of the Civil Services, universities and development organisations in Africa, the Middle East, South and South-East Asia. Many of its former postgraduate students now hold Government and university posts in those countries, where university and other educational programmes are still expanding and where there is still a large contribution to be made. The flow of postgraduate students from Third world countries will be endangered by the higher fees sought from the individual students and the sponsoring authories in Third world countries.
It is important that we should view as overseas aid bursaries to offset higher postgraduate fees. They should be made available to postgraduate students from Third world countries in a wider range of subjects than those hitherto associated with technical assistance. I believe that a fundamental reappraisal of the existing criteria of development aid is needed, and that there should be a return to standards which are in Britain's long-term national interest and in consonance with what development countries expect from Britain.

Mr. John Maxton: May I explain the rather cryptic exchange between the Minister and my hon. Friend the Member for South Ayrshire (Mr. Foulkes), because the Official Reporters and yourself, Mr. Deputy Speaker, might have found it difficult to understand? Apparently, when the Minister was in Jersey recently, he was asked who my hon. Friend was and he said that he had never heard of him nor seen him around the House. That was a remarkable statement, as anyone who knows my hon. Friend realises that he is often here and often loud in what he says. He tabled a Ten-Minute Bill on the question of Jersey and gained some success in the Budget. If the Minister reads the Budget carefully, he will see that there are now some curbs on people moving their ill-gotten gains to Jersey, and that is a result of my hon. Friend's work.
There are three major ways in which technical aid to developing countries can be provided. The hon. Member for Orpington (Mr. Stanbrook) emphasised the first, the training of people in technical skills—in other words, providing university or college education so that they can return with technical education for other people as well as continuing the technology. The second is to train and educate our own people in technology, as some of them will go abroad and work for British companies, foreign companies or even Third world companies in the technical field, and give advice or teach in universities and colleges in Third world countries. The third is to provide through aid or loans the technology that those countries require in order to build their economies.
The city of Glasgow has a proud record in all three respects. First, our two major universities, the technical colleges and many of our engineering companies in the past have provided large amounts of skilled and technical training for overseas students and those from the Third world. A result of the increase in the fees is that fewer overseas students are coming into our universities. The university of Strathclyde is basically a technical university and one which should provide those overseas students with that sort of training. The numbers are being drastically reduced as a result of the Government's policies and the city of Glasgow is therefore failing to produce the technical aid that it should be providing.
Secondly, fewer of our own students and youngsters in Glasgow receive the sort of training that we should provide. I want to link that with the third point, which is the provision of direct aid. I have in my constituency a company called the Weir Group. Two of its individual companies are Weir Pumps and Weir Westgarth. One of them manufactures pumps and 75 per cent. of its production goes overseas and a large part of it to the Third world. Weir Westgarth designs and contracts desalination units. Desalination is the production of fresh water from salt water. The units will be essential if Third world countries are to raise their standard of living. Many countries, particularly arid countries, lack a basic supply of water which will have to be provided through the units.
Twenty years ago, the company took on about 300 apprentices almost every year. Last year, it took on eight apprentices, three of them engineers and the remainder in general technical spheres, not directly in engineering. The drop in the level of apprenticeships and skills training means that the company is less able to provide the technical aid to Third world countries that it should be providing. In the past, when setting up a desalination unit, the company has taken people from the country itself and brought them to Glasgow for training in the running of the units. Its capacity to fulfil this role is being reduced. This is only one instance of people both from overseas and from Britain who are not receiving the training that should be available to them. Across the whole field, there are large numbers of people who should be taking their technical skills abroad. That is not happening, and the Third world suffers.
At lunchtime today my hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) and myself attended an exhibition in London where Glasgow is trying to sell itself and to attract investment back to Glasgow. I hear my hon. Friend say that he told me to say that. I always take my hon. Friend's advice. He is sometimes a very wise man. At the same time that Glasgow is trying to rebuild its great tradition of providing technology to the


Third world and overseas countries, one of the two companies I have mentioned, Weir Westgarth, where the multi-flash desalination process was developed by a Glasgow man, intends to move its whole operation down to London. This will mean a large number of redundancies in my constituency. From a Glasgow point of view, the move is very damaging. It is also damaging in the long run to the countries where Weir Westgarth desalination units operate. If the link is lost with traditional customers in Glasgow, who have provided supplies, the company's ability to continue in this field will be lessened. It is already in danger of losing business.
The Prime Minister, when she returned from a visit to the Middle East some time ago, made great play of the fact that a big order was coming to Glasgow from Dubai. That order has never come. Unless it comes soon, it will not come to Scotland at all, but will go to London. That will be regrettable, to say the least, for Scottish people. This company, together with Weir Pumps, should be providing massive technical aid to the Third world. This is the decade of fresh water. It is the hope of the United Nations that every person in the world in this decade will have access to fresh water. Such an achievement, would go a long way towards eliminating disease.
The two companies, Weir Pumps and Weir Westgarth, in my constituency should be in the forefront of providing the technology. Weir Pumps provides equipment for pumping fresh water in reservoirs and other forms of water production. Weir Westgarth, in terms of the multi-flash process and reverse osmosis, is a world leader in desalination. It is, however, not receiving the orders that it should be getting. The Government are not providing the back-up and the aid to the companies to ensure that they receive the orders and that they can fulfil them. They need to be assured of the bonding and the back-up that is required.
It would be helpful if the Government would take an initiative in helping the Third world and our own industries by providing some form of corporation or unified body, established among different companies in the sphere of desalination, to enable them to contract with Government support and so assist the Third world in terms of water supply. This is a mutual process. Too often the Government—I do not blame the present Minister—give the impression that aid is a charity. It is not. It is mutual. We help the Third world. By giving aid, we help ourselves. That is particularly true in respect of the companies in my constituency to which I have referred.

Mr. Michael Marshall: I was interested in the remarks of the hon. Member for Glasgow, Cathcart (Mr. Maxton) on the relationship of aid and technical assistance in terms of hardware and the wider question of tied aids and technical assistance.
I pay tribute to the hon. Member for Bradford, North (Mr. Ford) for raising this matter. The hon. Gentleman's work in the Inter-Parliamentary Union and elsewhere is well regarded. The debate provides a valuable opportunity to examine the provision of technical assistance.
I should like to strike a personal note. The hon. Member for Bradford, North rightly stressed the importance of providing experience of British industry and technical matters for people from the Third world. They become the customers of the future. There are also opportunities to gain experience for those who provide the technical

assistance. I had the experience at the age of 22 of going to India for eight years, largely because of the building of the Durgapur steelworks. Many hon. Members will recall this classic example of substantial British aid directed to hardware and pulling through substantial technical assistance. The experience gained by all those involved was considerable. It gave young people the opportunity to gain much wider experience than would have been available to them working in their own country. This feature might be extended right across the argument for giving technical assistance.
I should like to probe the Government's thinking. I detect a change of emphasis in the attitude towards tied aid. The Indian coastal steel plant has seen an important contribution by a number of Government Departments, in partnership with industry, to achieve a major contract against tough competition, especially from the Germans. This raises the wider question of the degree of technical assistance that will be required. The provision of ground stations in Nepal was another tied aid programme linked with high technology.
Those two examples show how hardware, technical assistance and the aid programme come together in what I suspect is a changed emphasis to the traditional argument that untied aid was not only virtuous but that it produced more for Britain than for other countries. I am not sure how the figures will stand up currently, but I suspect that as the Third world begins to develop its technology there will be a change in that balance. The change in emphasis is appropriate to the way in which the world's industrial bases are continually altering.
An area of immense importance to the Third world, in which Britain is beginning to make substantial strides, is the provision of space technology. With the recent announcements by the Government of the defence satellite and the opening of direct broadcasting by satellite, Britain has, for the first time, a national space programme. We also have, through our partnership in the European Space Agency and the way in which that interrelates to the Third world, a much wider range of interests in developing the new range of the so-called "L-sats"—the large satellites—and European communication satellites. Britain is pre-eminent in communication by satellite, and when that process extends to cover remote sensing, the ability to chart the movement of floodwater, rivers, forestry and agriculture, the importance to the Third world is self-evident.
I draw the attention of the House to that aspect particularly because there is now an opportunity, through our provision of technical assistance, to put together the sort of package that many countries in the Third world now seek. I cite, for example, the Indonesian satellite and the way in which the Arab countries, through "Arabsat", have come to regard this form of communication as a way, in one bound, of becoming totally free in communications. As we all know, the problems of using terrestrial networks in these large land masses are enormous and capital expenditure is very high. Therefore, satellite communication has an obvious attraction to the Third world.
My right hon. Friend the Minister will recall that the Prime Minister signed an agreement in India last year on space co-operation and assistance. I hope that that can be built on, because ever since the agreement little has been said on that subject. However, it raises the question of opportunities in countries such as India where, as is well known, it is now possible by satellite broadcasting to bring


educational and informative programmes into the most remote villages of that vast sub-continent. In such areas, British technology, technicians and hardware can be brought together, through the linking of the aid programme and the provision of technicians, in a much more effective way than in the past. I have been encouraged by the recent shift in emphasis, as I read it.
We must consider what can be done to expand that principle, not just for satellites, of course, but into the important area of ground station provision. I say "ground station provision", because I mean going beyond the provision of just the "dishes", as with Nepal. Britain's highly sophisticated system of processing information and computer expertise—Britain is a world leader in software equipment—can be of the greatest possible assistence.
I relate it also to our military expertise. If one considers the value of defence satellites, not just in communications, but in surveillance, one realises that in many critical parts of the world—in the Third world where there is danger of conflagration—the ability to have such surveillance activity would help to decrease the chances of local wars that might escalate in a way that we would all wish to avoid.
Britain has a great deal to offer in that range of new and exciting technology. Therefore, I urge my right hon. Friend the Minister to consider ways in which his Department can play a part. I ask for Information Technology Year to spread its influence to my right hon. Friend's Department in a way that I suspect has not been traditional. Many of us consider that this new technology and its impact on the Third world means that we are breaking new ground. I have tried to suggest some practical and direct ways in which such projects would assist the Third world and help British technology skills to gain wider experience as individuals. That would benefit both Britain and those countries for which so many hon. Members have shown considerable care and concern this afternoon.

Mr. Thomas Cox: I shall speak on items B6 and B11 of the Supply Estimates 1981–82 which relate to the financial help to be given by the Government to countries such as Cambodia, Nicaragua, Thailand and Somalia for help in refugee camps. Many of us welcome the help that is to be given. However, the sum involved—about £325, 000—while obviously very welcome, is a pitifully small amount for the crucial work that must be done as a result of what has happened in those countries.
I shall concentrate on item B11—the help given to Somalia. That is part of the allocated sum of £250, 000 which it is to be given. The House should consider the enormous problems that countries such as Somalia must face because of refugees. Whenever a country has refugees, it is presented with problems. Those refugees are often from within the country, but people cross the border into Somalia for safety. Therefore, they place enormous problems on that country. What can be said about Somalia can also be said about the Sudan. Great credit must be given to such countries for the unstinting help that they give to refugees who cross their borders.
I know that the Minister has visited many refugee camps during his period in office. He will have witnessed

the enormous hardships suffered in those camps. He will also have seen the work that the people who administer those camps must tackle—often with antiquated equipment and very limited facilities. They are trying to bring some comfort and help to thousands of people.
Despite our economic problems—one must accept that we have such problems—I am sure that many Third world countries would prefer our problems to their own. Their problems are far greater than any of ours.
I welcome the money that the Government have provided, but it is pitifully small. What will the Government's position be when the second instalment of the £250, 000 that has been allocated has finally been paid to Somalia? Will further moneys be made available?
I am sure that the Minister will agree that countries such as Somalia—an extremely poor country—have the added problems of looking after the refugees. It is a matter of providing food and facilities for these people. The camps are often sited in remote areas where there are no existing services that can be built up. It all costs money. I am sure that the Minister must have been told on many occasions that such countries are concerned—one can understand this—by the attitudes of their people who, when they see refugees entering their country, are obviously worried about the sort of help that will be given to them and how much they will suffer as a result of them being in their country. That is why it is important to find out from the Government, after the £250, 000 has been paid, whether they will consider sympathetically any possible approaches by Somalia on this crucial issue for further aid.
What encouragement is the Minister giving to young people in Britain, who are often dedicated and talented but, sadly, out of work? Given the right encouragement and incentives, I am sure that those young men and women would willingly go to help in refugee camps. What sort of help are the Government giving? Surely, it would be of far greater help to pay those young people a salary in return for going and helping people in the Third world than to pay them unemployment benefit and have them remain in idleness in Britain. I should like to hear from the Minister about what will happen.
Another point that has already been discussed this afternoon—I make no apology for referring to it again—is student fees. The loss of talent that many countries must be starting to experience because of increased student fees is often mentioned to hon. Members on both sides of the House when people holding ministerial positions in other countries come here. They say that their talented young people can no longer come here because of increased fees. I am sure that the Minister is not unsympathetic to this key issue. I believe that the Government have been the best recruiting agent for the Communist world because of the increase in student fees. There is no doubt that some countries in Eastern Europe will willingly accept talented people from many parts of the world—people who would have come to Britain had there not been an increase in student fees.
We have debated the issue many times—some Conservative Members are equally as concerned about this issue as Labour Members—but I hope that it will not be long before we hear from someone in the Government that there has been a change of policy. We know that poor countries with limited resources must decide how they will spend their money. Often the demands in those countries for improvements are greater than the need, in their eyes, to send their talented youngsters to countries, such as


Britain, to be trained for the future development of their countries. We cannot feel happy about the matter, and I hope that we shall examine it as soon as possible.
We discuss many controversial issues in the House, on many of which we are deeply divided, but I hope that especially on this aspect of the Estimates—help to the Third world and to refugee camps—there will be general agreement that we should try to increase aid. A few people will criticise whatever help is given, but, to judge from the correspondence that I have received, there is an enormous fund of good will for help from the Government to be given to the Third world. Those who write to me ask that the moneys allocated should be properly and wisely spent. I can well understand that point of view. If we were to read tomorrow in the national press that a British youngster had been found dead from hunger, there would be a national outcry. The social services in whatever part of Britain it had occurred would prepare reports and there would be statements in the House. Sadly, we know that in many underdeveloped countries young children are dying every day, not through lack of concern but through the lack of resources. Britain should face up to such a challenge.
The attitude of developing countries towards Britain will not be measured by whether we possess the Trident missile. That is not of great concern to them. What will condition their attitude to us, not only now but in the future, is the sort of response that we, as a major industrial power, make to their problems. I welcome the help that has been given, but it is still not enough. I welcome the concern of the Minister for Overseas Development, but I hope that he and hon. Members on both sides of the House will do everything possible to see that some of our money—do not let anyone say that we do not have the money—is allocated in greater amounts to help people living in the sort of conditions that we in Britain have never experienced.

Mr. James Hill: I shall limit my remarks to one part of the Commonwealth—Sri Lanka. It is an island of 15 million inhabitants, 250 miles long by 100 miles wide. The geography of the island is such that the centre rises to peaks of between 6, 000 and 8, 000 ft. The island is world famous for tea and in the Nureilia area there are some of the finest tea plantations in the world. Now it is also attempting to build up a tourist industry. Sri Lankans are extremely good supporters of the United Kingdom. Her Majesty the Queen and Prince Philip made an official visit there at the end of last year. They were received with tumultuous admiration. The occasion made one realise that the former British Empire has left a legacy of good will and lasting overwhelming loyalty to the British Crown.
The island's second visit by Royalty was only a few weeks ago when Prince Philip, wearing his hat as president of the World Wildlife Fund, made an official visit. He was presented with a baby elephant, which is coming to one of the London zoos. He was fortunate enough, as I was told by letter this morning, to see a drive of about 200 elephants from bare pastures to fresh pastures—the drive once again contributing to the preservation of a dwindling stock of wild elephants in Sri Lanka.
We as a Government—I speak perhaps for the previous two Governments—have supported Sri Lanka by allowing funds to go forward to build the Victoria dam, which is now nearly complete. I understand that its costs have

overrun, as with many other projects, by about £20 million, but I am sure that my hon. Friend will tell us, when he replies, whether he has been able to help with that project.
The most serious aspect of my speech today is that there is a vicious drought in Sri Lanka which is putting at risk the whole rice harvest this year. From the information that I have received, Sri Lanka will need more and more aid. It will need finances certainly to make more reservoirs of fresh water and especially in an area in the north—Jaffna—to complete the fresh water barriers there. Two have been built and another two are needed to complete the scheme. Then there will be 50 square miles of reservoir of fresh water for that particularly badly hit area.
The idea behind the fresh water reservoirs is that the people can then go in for fish farming. There is rich soil and if it gets a plentiful fresh water supply the Tamils, who are an extremely hard working, agrarian society, will be able to feed almost the whole of the island. It is envisaged that with sufficient fresh water not only could they feed the island but they could export to the Indian mainland. The opportunities are available.
Poverty in the sun is not quite as bad as poverty in Manchester or Birmingham, but in Sri Lanka the national wage is approximately £10 sterling a month. One realises the degree of poverty, especially in the circumstances of drought, when the rice harvest is disappearing. That national wage is a pitiful amount on which to keep a fancily of three or four, and there is a great need for us to support them.
The Sri Lankans are doing their best to help themselves. They are expanding the tourist industry. I was there in January and new hotels are being built. The tourist trade is attracting foreign currency, but even if it is built up, as they hope next year, to about half a million tourists, it will have only a small effect on the economy of the island. The economy is agrarian—mainly the production of rubber, copra, hessian and tea—and the emphasis all the time is on fresh water, not high technology.
In the streets of Colombo there are still Morris Minors being driven. They have probably done several thousands of miles, and are over 30 years old. The Sri Lankans greatly need to replenish not only the whole of their taxi fleet but their buses. I found when I talked to the Sri Lankan politicians that they are grateful for overseas aid money. There is a reciprocity clause. We provide British money and wherever possible they must buy British goods. I was told a sad story about how, when British Leyland was approached for Land Rovers for the Victoria Dam project, it said that there were no Land Rovers available. It is becoming only too obvious to those who visit the island regularly that Japan is beginning to move in, not on high technology but with small factories, vans, cars, lorries, diggers and road making equipment. The Japanese are there already and yet there is a terrific loyalty in the island to the British. We have not taken advantage of the good will that is there.
I must deprecate what has happened with British Leyland which seems to be able to let practically any other car manufacturer in the world run rings around it. All of what I call "the Whitehall administration cars" in Sri Lanka are Peugeots. That is because the French Government gave an undertaking that the currency and the credits would be available if the Sri Lankan Government


bought from the French company. I should have thought that we could do something similar to replace not only the buses but perhaps the whole of the taxi fleet in Sri Lanka.
The chairman of the Mahewali project, Mr. Panditdirantna, is fully conscious of the reciprocity arrangement and would like to continue to buy British wherever possible. However, things are such that these good friends of ours are sometimes being neglected.
There is a feeling that, at the end of the Victoria dam project, when a great deal of extra agricultural land will become available because of fresh water supplies one side of the island will become very prosperous and the north, the Jaffna area, will become the poor relation. I am saying this, because only six or eight months ago one of the prospective parliamentary candidates for the United National Party was assassinated in Jaffna. Terrorism could easily break out there by a feeling of Sri Lanka being two nations.
It is possible for us not only to help the living standards of everyone in Sri Lanka but to stop any division that may be created in the islands between, say, the Muslims and the Buddhists, although it is not quite that simple. The barrier is not as religious as it is in Northern Ireland, but there is a feeling that those in the north, the Tamils in particular, are being neglected, and that when the Victoria dam is completed they will be even more neglected.
We can help. I hope that it will be possible for my hon. Friend, when he is on one of his tours of the world, to go not only to Colombo but to Jaffna—perhaps he has already been there—to examine some of the imaginative schemes. Some of them may be far-fetched, but some of them are workable. For example, I went to a factory where all sorts of sea food, such as prawns and lobsters, were being deep-frozen and exported to France.
The Sri Lankans have the imagination. What they need is an initial push to provide them with fresh water to survive. The drought is serious and the standard of living is extremely bad. Thank goodness, they are a happy people; otherwise perhaps no one would have survived. We have many friends in the island. I hope that my hon. Friend will be able to say something about Sri Lanka and some of the problems facing it.

Mr. Frank McElhone: We are extremely grateful to my hon. Friend the Member for Bradford, North (Mr. Ford) for initiating the debate. His continuous and sustained efforts in the interests of the Third world are well known, and I know from my own experience how keen his interest is.
My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) and I were today at an exhibition in London promoting the industrial and commercial potential of the city of Glasgow. If any city has possessed the technical skills and the ability to transport those skills to Third world countries, I think, without being too parochial, it is Glasgow. I hope that the Minister, if he does not get the opportunity of visiting the exhibition himself, will at least encourage his officials to contact Lord Provost Kelly or Mr. Verico, who is acting as the organiser and coordinator of the exhibition.
Several times today the question of fees for overseas students has been raised. I make no apology for raising it again and the Minister will be aware that I have raised it

several times over the past few months in speeches and questions. The mood on both sides of the House is one of deep and serious concern about overseas students. As they are paying full cost fees, there will be a 34 per cent. drop next year in their numbers. That has a substantial effect both on university life and on the quality of universities.
My hon. Friend the Member for South Ayrshire (Mr. Foulkes) has just returned from Cuba and he has informed us that President Castro is aware of the potential of these students and is encouraging Commonwealth students from the Caribbean to be trained in Cuba. The Minister and I know that France and Russia are snapping up students from the Commonwealth. When these young people go back to their countries, they will hold substantial positions in commerce, the Government and the armed forces. As several told me when I met them recently here in London, they will not buy British goods. They will purchase goods from the countries where they have trained. We are destroying the seed corn of the next generation of British orders.
If the Government needed any lesson in this regard, the recent visit of Lord Carrington to Malaysia showed him that, although Malaysia gives us substantial orders for industrial equipment, amounting to over £100 million, it wants British education for its students. That was made abundantly clear to the Foreign Secretary. We have a potential and a richness to impart to such countries. For the miserly cost of £100 million over three years, we are losing thousands of millions of pounds of orders in the coming years. I hope that the Government will take account of what I say. I know that the Minister will tell me that he had made some effort in this regard through his own Department—in this case, of course, most of the students of whom I am talking come through the DES. So perhaps he will acquit himself of any responsibility in this connection.
I want to raise the question of our contribution to the European development fund. I reiterate my concern and criticism of that fund. According to 19 of the Supply estimates, we are expected
to contribute 18·7 per cent. of the Fourth European Development Fund and 18 per cent. of the Fifth European Development fund.
The Minister knows, as I know, that we get a poor exchange for that mandatory contribution. Despite paying more than 18 per cent. to the European development fund, we are lucky to get 10 per cent. in industrial orders. This country possesses many skills—educational, industrial, and scientific— yet the French, in particular, have used the European development fund to their own advantage.
On 11 April, and in previous debates, I asked that the Foreign Secretary or anyone else visiting Brussels should raise the matter of France holding the Development Commissioner's role for nearly 20 years, which is a scandal. It is unfair both to us and to our European partners. France has used that role to her advantage, and we have been the loser. An early opportunity must be taken to discuss the matter. Although India and Bangladesh may not come within the Lomé convention, because of our responsibility for the poverty that now exists in Bangladesh, we should draw attention to the fact that the European development fund is grossly underspent and that money is available.
The hon. Member for Arundel (Mr. Marshall) raised the interesting subject of satellites. He has a friend in me. It is passing strange that we use satellites to beam the Miss


World competition or a football competition, but not to educate people about how money is used in the Third world or how it should be used. I am sure that the right hon. Member for Daventry (Mr. Prentice) will agree that it is extremely difficult to get aid to the poorest people in the poorest countries. No one has solved the problem. There are many reasons for it—corruption, maladministration, perhaps lack of proper surveillance, and lack of proper monitoring. The Prime Minister has said several times that we are now spending £1, 000 million, but we know that only a minute fraction of that money reaches the poorest people in the poor countries. We do not want satellites as a "Big Brother", but they could encourage countries to spend our money, and to spend it where the need is greatest. Satellites are a good way of educating people, but they are a good way of transferring technology and skills, and save a great deal of time and expense.

Mr. Michael Marshall: I am pleased to hear what the hon. Member says. Will he allow me to say that I should have declared a commercial interest in helping British Aerospace? However, there is a united British industry interest here. Does the hon. Gentleman agree that, while television may be thought of as a luxury, in relation to the community use that television can have for educational purposes in villages, for example in India, it is cost-effective aid?

Mr. McElhone: I entirely agree. Poverty in the poorest countries tends to be in rural areas, and there is not a teacher for each village. Without jumping too fast into technology, I think there is a limited role for television in small townships and rural areas. The question of priority arises, and when it is a question of 1, 000 water pumps, or providing irrigation or health, as against satellites or television, the choices are agonising. Of course, the problem is not uniform in every country. Developing countries might need the assistance of which the hon. Gentleman speaks. There is a role for satellites. They should he developed to a much greater extent. It is technological assistance, just as much as providing water pumps, and I hope that the Minister will take account of what I and the hon. Member for Arundel have said.
Nicaragua has featured largely in the newspapers, television and radio over the past few months. As the Minister knows, I visited that country about 15 months ago. I refer the Minister to an answer that I was given on 1 February this year, when he said that the Government there
follow a doctrinaire Marxist-Leninist line.
That is grossly unfair to the Government of Nicaragua. When I say that their Foreign Secretary is a Jesuit Catholic priest, and that four members of the Catholic Church are in the Government, they can hardly be accused of following a "Marxist-Leninist line". The Nicaraguan Foreign Secretary came here recently. The Minister said, in answer to my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara):
We have had no specific requests … for mining machinery".—[Official Report,  1 February 1982; Vol. 17, c. 17–18.]
I raised the matter with the Minister because, after 40 years of dictatorship under Somoza, all the mining equipment was smashed and most of the equipment in factories was destroyed. Indeed, Somoza took most of the treasury, such as it was, with him abroad into exile. Nicaragua was looking for grants and loans at reasonable rates of interest,

and they were hoping to buy British machinery. In this country we have experts in mining machinery, and although Nicaragua is a small country, the potential was enormous. I hope that the Minister will think again. It is disgraceful that Britain is the only member of the EEC not to have an aid programme for Nicaragua, apart from the £30, 000 which the Minister announced recently for Red Cross ambulances, and so on. That is an insignificant amount.

Mr. Hill: Derisory.

Mr. McElhone: It is derisory, as the hon. Gentleman says. I used that word when intervening in the Minister's speech on 11 February.
The Nicaraguan Foreign Secretary bluntly and plainly told me, when I met him in the House, that his country does not want to ask Russia for assistance. He said that Nicaragua is a small country which is bankrupt and fighting for economic and political survival. He told me that he came to Britain hoping for assistance, in the form not of grants, but of loans. He said that if he did not receive that assistance he would have to approach Russia as well as our European partners. If Germany, France, Belgium and Holland think that Nicaragua is worth helping, surely Britain, with its long record of compassion and idealism in assisting countries that are in trouble, should think again. I hope that the Minister reconsiders the position before it is too late.
It is traditional for speeches on the Consolidated Fund Bill to be short because many Back Bench Members wish to raise other matters, but I must make the point, as I have done on previous occasions, that the world is far too small for anything but interdependence. The Government are operating the economics of lunacy. There are 10 million unemployed people in the EEC. It is tragic that there is $87 billion lying unused in the Eurodollar market and the banks belonging to OPEC. Britain has a target of providing 0·34 per cent. of our GNP in aid. I hope that it is rising. However, there are 800 million poor people in areas of the world which are virgin markets. Those markets could be expanded for our industrial and commercial interests by giving technical assistance.
I do not expect the Government to accept the moral argument for feeding the hungry, or to understand the philosophy of helping the Third world. However. should have thought that a so-called entrepreneurial business Government would have seen the economic arguments for assisting the underdeveloped countries. Once a start is made in such areas the opportunity follows for expanding our industrial base, which is rapidly shrinking year by year because of the Government's policies and many other factors.
A Commonwealth Parliamentary Association delegation is here to look at our Parliament—the Mother of Parliaments. It is ironic that we shall receive a reply which, despite the Minister's sympathy, we know will be far from encouraging because we have such an attitude from the Prime Minister day after day. While millions are dying of hunger and suffering poverty and disease, the House not only fails the Third world, but fails democracy itself.

The Minister for Overseas Development (Mr. Neil Marten): I am sure the whole House is grateful to the hon.
Member for Bradford, North (Mr. Ford) for giving yet another airing to this subject. There has been a high rate of debate on the general subject of aid, not only in the Chamber but in the other place. I am glad that he drew No. 1 in the Consolidated Fund debate, because if he had drawn No. 13 we might be debating the subject at 3.30 in the morning.
I well remember the visit which the hon. Gentleman and I made to the Caribbean, to which he referred. I think that it was in 1965. I thank him for his kind reference to my part in the first aid project for the British Virgin Islands. The hon. Gentleman and I were shown around the agricultural centre there. The people there said that what they wanted was a good bull so that they could breed cattle.
When I got home to my constituency it so happened that I was speaking at the annual Christmas fat stock show at Chipping Norton. I said to my farmers: "Here is a colony that has been loyal for hundreds of years. I would like you to subscribe to send out a good young red poll bull so that the fanners in the colony can sell their produce as a result of the breeding."
We identified one of the best pedigree red poll bulls in the country at the cost of £500 plus shipping. I received quite a lot of money, but we still had not reached the target. Therefore, I contacted the local press and asked it to help me to reach that final target. We discussed what was wanted and in the next week's edition of the Banbury Guardian,  the headlines were: "Bull for the Virgins". That story attracted the people's interest and the money came in. We achieved our objective. I am glad that the hon. Gentleman remembered that.
The hon. Gentleman wants more aid. Most people would like to spend more on aid, but as I have said repeatedly in the House, we must get our economy right so that growth starts. The best form of aid that we can give the developing world is to increase trade by our country's growth demanding that we should import more from developing countries.
The hon. Gentleman mentioned tractors at a constituency level. In 1980 £2·1 million was spent on the provision of tractors to the developing world. However, that figure relates only to purchases under bilateral aid and it excludes purchases through multilateral programmes, voluntary aid and so on, where we have done well. However, I do not have the details of the numbers of tractors supplied.
I was in Sierra Leone looking at agricultural development there and more recently I was in Botswana, Lesotho and Swaziland. There is a move to return to the ox-drawn plough. At the agricultural college at Sierra Leone an ox was going round and round testing out different ploughs. The people there are beginning to believe that the tractor is not necessarily the right form of power for ploughing in many areas of developing countries. There is a return, of which some people are glad, to ox-drawn ploughs.
Many hon. Members have mentioned overseas students. That is a matter for my right hon. Friend the Secretary of State for Education and Science but the Overseas Students Trust is considering it. I understand that its report should be available reasonably shortly, when that matter will be considered by the Government. The report should include an attempt to assess the extent to which we

get a technical spin-off from education. It is easy to say that and one imagines that it happens, but what we want is an assessment of the validity of that argument. My hon. Friend the Member for Orpington (Mr. Stanbrook) raised the same point.
I should like to say a word about the hon. Gentleman's constituency university. I do not know whether it is in his constituency or in another area of Bradford. The project planning centre at Bradford has an enviable reputation in project planning and development. The centre has become self-supporting, if not profit-making, which is a good example to other universities.
The centre's income is derived from student fees and from the provision of overseas consultancy services. My Department contributes to it through the fees of overseas students whom we sent to the centre under the aid programme. Within the limits of a constricted aid programme and the Government's priorities the Overseas Development Administration can continue wherever possible to support overseas students on courses such as those of the Bradford centre, and to consider on a competitive basis the use of people from Bradford and elsewhere as consultants. My advisers are well aware of the claims of the Bradford centre. I hope that the hon. Member for Bradford, North will draw that passage of my speech to its attention.
My right hon. Friend the Member for Daventry (Mr. Prentice) tended to agree that not much aid goes astray now compared with what happened in the past. I dealt with that matter in a previous debate. I stress once again that we assess the projects before, during and after. We monitor them most carefully and we have a strict accounting system. The money that is spent is very much under control, and the old days of aid moneys being used to purchase Mercedes cars for Ministers are over. But I touch wood, because one can never know everything that happens. There are mistakes but we do everything possible to control the expenditure.

Mr. McElhone: I wish to refer to the misuse of aid funds. We are a mandatory contributor to the European development fund. We have had disturbing reports about the way that the money is used, and that the auditors are being brought in. Has the Minister made any representations on the European development fund, and if so what answers has he had?

Mr. Marten: This morning I spent about one and a half hours with Mr. Pisani, and time was spent on that subject. The hon. Member for Greenwich (Mr. Barnett) raised the subject in a previous debate and has tabled three questions on it. I shall be writing to the hon. Member for Greenwich about the result of our discussions and I shall send a copy to the hon. Member for Glasgow, Queen's Park (Mr. McElhone).
My right hon. Friend the Member for Daventry referred to teachers. In the developing world, stress must be placed on management and marketing. Often in a developing country such as Fiji there is a wonderful product such as crystallised ginger which cannot be bought easily in the shops in Britain. One suspects that if the Fijians had the necessary marketing skills they would do far better. The same is true of Tanzania which has some of the best instant coffee in the world. It cannot be bought in the shops in Britain. Therefore, marketing is an important aspect of what we teach people from the developing world.
The hon. Member for Kingston upon Hull, West (Mr. Johnson) spoke eloquently about Somalia. He and I share the tragedy of those people. His interest in that country is well known in the House. There was a general feeling in the debate that we should spend more on helping the refugees in Somalia. I have the figures for what we shall spend on refugees generally in 1981–82. We shall spend £16 million on refugees. That figure has to be split up between the United Nations High Commissioner for Refugees programme, relief workers in the near East, special appeals, Africa, Afghan refugees, El Salvadoran refugees, the Far East problems and the British voluntary agencies. It is an enormous sum. We should like to spend more on aid. It is a tragedy that we have to spend money on refugees but is seems that there have to be refugees. One is forced to the conclusion that certain countries and certain Governments with certain philosophies cause people to seek freedom. We are supporting people who have chosen freedom. That is certainly so in Pakistan with the refugees from Afghanistan.

Mr. James Johnson: The Minister may not be able to answer my question or he may not want to answer it, but will he give me an answer in the near future when he has worked on it? The EEC gives aid to the Horn of Africa—Ethiopia, Somalia, Uganda and elsewhere. Will the right hon. Gentleman ascertain whether any of the money is seeping into Addis Ababa and being used for the settlement of Ethiopian peasants in the Ogaden? This is a tender point with African politicians. They feel that it is a form of genocide that people are being settled on land which has been gained only by fighting and evicting those who have lived in the area for centuries.

Mr. Marten: I take and recognise the point that the hon. Gentleman is making. I shall put through a specific inquiry on that specific issue. Ethiopia is a member of the ACP and has a perfect right to European Community assistance under the Lomé convention. However, the use to which it is put is the point that the hon. Gentleman is on.
The hon. Member for Tooting (Mr. Cox) also talked about Somalia. When I visit refugee camps, be they in Pakistan, the Sudan or wherever, I am struck by the refugees' utter sense of despair about their future. It is terrible to experience it. One of our aid programmes in the Sudan is devoted to resettling Ethiopian refugees so that they can have some hope for the future. The despair of the Afghanistan refugees in Pakistan must be terrible as they do not know whether they will ever get back to their homeland.
My hon. Friend the Member for Orpington talked about education. Under the aid programme, there were 14, 000 students from overseas in Britain in 1980 and the number will be of the same magnitude for 1981. Many of the issues that my hon. Friend raised are for my right hon. Friend the Secretary of State for Education and Science.
I noted what the hon. Member for Glasgow, Cathcart (Mr. Maxton) said about the technical training that can be provided. He mentioned especially Weir Pumps. When I was in Cairo I offered aid of about £50 million for the new Cairo waste water works. I gather that tenders have not yet been sent out but there is a great opportunity there for Weir Pumps. I hope that the company is successful in the bid when the tenders go out. I cannot comment on what the hon. Gentleman had to say about desalination but I shall write to him about that.
My hon. Friend the Member for Arundel (Mr. Marshall) has no need to worry about the subject that he raised because I was a junior aviation Minister from 1962 to 1964. I am hooked on that subject. We give industry considerable assistance with aid trade provision and our tied aid, which bring many jobs to the country. It may interest the House to know that we have helped with aid trade provision of some £174 million. That has helped win export orders of £760 million. Of course, four fifths of our bilateral aid is tied to United 'Kingdom-produced goods.
I recognise the point about television and so on in the developing world. I have seen it operating in the university of the South Pacific in Fiji where courses are run through the television network to people in the outer islands who cannot afford to go to the university in Suva. I must strike a note of caution, however, about not trying to get too much sophisticated equipment into the developing world where the equipment cannot be worked. It is an unfair use of aid money to sell such countries extremely complicated equipment which, as has happened in the past, may break down. They then cannot run it.
The hon. Member for Tooting mentioned the possibility of the young unemployed going out to help in the Third world. I should like to be able to do that, but whenever we have sent people to the Third world countries they have said that they want technically skilled people. We cannot just say to 50 unemployed people, "Off you go. we will pay". The countries to which they are going specifically ask for highly trained people.
My hon. Friend the Member for Southampton, Test (Mr. Hill) mentioned Sri Lanka and asked if I had been there. I have indeed been there. On the Victoria dam, I understand that there is a cost overrun for which we are not responsible. No doubt that will be discussed, but so far, we have said that any cost overrun is the responsibility of the Sri Lankan Government. My hon. Friend also mentioned other water projects there. They must be carried out by other countries as well. I understand that Germany and the World Bank are interested in that type of project. The Victoria dam is an enormous project on which we shall spend £100 million over five years. It will bring great benefit to the people of Sri Lanka, in terms of electricity and the irrigation of the Mahaweli project, where tens of thousands of farmers will be settled and it is hoped that enough rice will be produced to satisfy home consumption and produce a surplus for export. We are doing our bit there. As my hon. Friend the Member for Southampton, Test said, the Sri Lankans recognise what we are doing and are grateful for it.
The hon. Member for Glasgow, Queens Park asked if I would visit the exhibition in Glasgow. Perhaps I can consider that. If I do, I shall of course let him know.
I discussed the European development fund this morning with Mr. Pisani. We contribute 18 per cent. to that fund and receive 12 per cent., but we have investigated this and have strengthened our mission out there to help businessmen. I hope that the business men get cracking and can pull in the contracts.
I am going to Bangladesh next week and shall examine the situation there. As for getting aid down to the poorest, the Victoria dam is a superb example in which, although aid goes to the Goernment and not direct to the poorest, the results go to the very poorest people such as the small farmers in Sri Lanka.
I thank the hon. Member for Bradford, North for having raised this question. The House always enjoys a debate on


aid, as I certainly always do. I am grateful that the hon. Member suggested it and that—thank goodness—he drew first place in the ballot.

Orders of the Day — Tenants (Right to Buy)

Mr. Fred Silvester: Buried in the Supplementary Estimates is a new sub-heading which is interesting in itself—sub-heading C7 of Class VIII, 5 relating to expenditure incurred by the Department of the Environment under section 23 of the Housing Act 1980. That money has been incurred by the Department because it has been necessary for it to intervene, in the case of one authority, to enforce the right of council tenants to buy their own houses. It is worth marking its first appearance. It is also an occasion on which we can take stock of the existing situation. The £30, 000 in the estimate is the tip of the iceberg. It has important social ramifications for the country.
The sale of council houses represents extremely good value both to the purchaser and to the council concerned. In the case of the purchaser, evidence is accumulating that, as the number of people buying their own houses increases, what was expected is happening. There is a great deal of personal satisfaction among families, and the improvement of the housing is marked. It is possible now to walk along a street and detect those houses that have been sold. They are different from the unsold houses not simply because their upkeep is improved but also because they display greater individuality. That is good not only for the person who owns the house but for the estate.
I do not doubt that, as the number of examples of private ownership in an estate grows, the effect will gather momentum, the advantage will be seen, and the number of properties for sale will increase. I understand that the number of houses being sold currently, nationally, is about 250, 000.
The value of council house sales to the council causes apoplexy in some quarters. Many council houses have static populations. The turnover in tenants is small. The fact of the sale is valuable to the council. In Manchester, for example, about 1, 000 houses have been sold. I am told that the average discounted value, nationally, is about £4, 000 per house. That produces more than £4 million in Manchester from the houses that have been sold.
The cost of external repairs to council houses is about the same. The cost of the modernisation programme for council estates is between £11 and £12 million. Substantial sums of money therefore become available to councils for carrying out much-needed activity in the remainder of their estates. The importance of the money from sales should not be under-estimated.
We have carried out many surveys. One of them revealed an interesting point. If people are asked what concerns them most, poor maintenance of council houses almost always comes fourth on the list—after rates, crime and, now, unemployment, the third varying between unemployment and the cost of living. The poor maintenance of council houses is always fourth on the list and accounts for an eighth or a tenth of replies.
One has only to hear some of the endless stories that come from council estates to know why that is. House maintenance, delays and bureaucracy are poor. I do not necessarily blame the people involved. Where there are over 100, 000 houses, as in Manchester, a particular kind of management structure is required. Special skills are needed to manage the complexities of such an estate efficiently.
It is of value to councils if the houses are sold. I was glad that the Secretary of State recently drew attention to the fact that capital sums from the sale of council houses are available for other local authority capital expenditure. It is important that we press on with this.
It is sad that the Secretary of State should have such an estimate. In a sense, it is an estimate of the local council's failure to undertake the duties that have been laid upon it in the interests of its ratepayers. It has nothing to do with lack of money or staff; it is a matter of attitude.
I have a leaflet which the Manchester city council sent to its council tenants to try to put them off the idea of buying their houses. It is full of gloom concerning interest rates and the fact that many home owners find it difficult to afford to keep their property in good repair. It says:
Sooner or later, you will probably want to sell the council home which you bought … are you sure that your home … will be attractive to buyers?
What it does not say is that those who undertake to buy their homes almost certainly find that it is the most important financial transaction in their life, and their only chance to obtain an asset that will appreciate during their working lives.
The Supply Estimate is for a defaulting council. As I say, it is all a matter of attitude. Can the Minister confirm that the £30, 000 in this estimate can be claimed back by the Government? It is important for ratepayers to understand that if a council defaults on this obligation, and the Government have to act for them, the cost should be borne by the council. It raises the question whether a council which deliberately evades responsibilities that have been upheld by the Court of Appeal, will be subject to surcharge. It would be interesting to pursue that. If that situation was multiplied across the country the charges would be considerable. I should be grateful if the Minister would clarify whether or not the Government can recoup such costs.
The Secretary of State gave the following reason for his decision to act in the case of Norwich. He said that its
projected future performance, on which it has declined to give any assurance of further improvement, appears to me worse than that of any other authority".—[Official Report,  3 December 1981; Vol. 14, c. 399.]
I take his word for that, but there must be a number of other authorities which run Norwich pretty close. Although within the rules of order I do not think that I am allowed to ask for it, perhaps a larger Supply should be sought in order that we should move into other areas.
In February, a solicitor in my constituency wrote to the Secretary of State about the situation in Tameside with information that he had received from the deputy director of administration for that borough. In Tameside, there were 1, 300 applications, but the council employed only seven staff to deal with them. Each person had five cases on his desk. That meant that at any one time 35 cases were being dealt with. Those dealing with them were not permitted to take on another case until the cases that they were dealing with had been concluded. As one case fell off the list, another came on. Cases were being completed at the rate of 96 per year. On that basis, those seeking to buy their houses in Tameside would have to wait 13½ years to complete the list. That is clearly preposterous, and the situation cannot be allowed to continue.
I understand from the figures deposited in the Library that the city of Manchester had, at 31 December 1981, received 6, 841 claims—the figure is no doubt higher now—and has admitted 6, 451. At that date, it had

processed 1, 028—about one-sixth of the total. I congratulate my hon. Friend the Minister on the way in which he has chivvied councils into better performances. As we all know, that is a tricky operation. However, it is noteworthy that my hon. Friend has had several successes, including the city of Manchester. As I have said before, Manchester is not averse to spending money and its staffing ratios are unequalled by any other part of the country. Yet, so far, it has refused to divert sufficient people to deal with this matter.
Yesterday, I received a letter telling me that the town clerk has appointed four people, with greater experience, to the right-to-buy section. That increases the comparatively inexperienced force from seven to 11. Matters may be speeded up; and I am grateful for that. That step was taken after a considerable number of complaints had been forwarded to the Minister. Nevertheless, we must go on, because the four new staff have a tremendous way to go.
I return to the case of Norwich and to the subject of the Supplementary Estimate. The Secretary of State has set up his own operation. In a written answer to my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) on 23 February, my right hon. Friend said that he hoped that all the cases would be dealt with by 30 June 1982. That was his objective. In the city of Manchester, we are nowhere near that standard. I have written to my hon. Friend the Minister about several cases; and I shall refer to two such cases now. On 11 January, a Mr. Burrows was informed that the town clerk would be able to reply to him in 21 weeks' time. On a similar date, a Mrs. Pluples was told that he would be in a position to reply in 31 weeks' time. A glance at my diary tells me that Mr. Burrows will not receive his reply before 1 June and that Mrs. Pluples will not receive hers before 1 August.
I am particularly concerned about the nature of the response. I hope that my hon. Friend the Minister will bear in mind the apparent compliance with the desire for greater speed which masks something rather slower. For example, there are six people on a list of eight which I have—Mr. Cegla, Mr. Garvey, Mr. Carey, Mr. Myers, Mr. King and Mr. Callaghan—who all applied to buy their houses and who had an acceptance between July and October; in most cases-, they received the acceptance in July but in one case it was as late as October. In two cases there has been a response from the town clerk but neither of them has been accompanied by plans. So it is impossible for the conveyance to proceed because it is not clear what is being conveyed.
It is important that we should not get into the position where there is an apparent response to the Minister's desire to speed things up in the sense that something is sent out, but since not sufficient is sent out for the conveyance to continue, the whole thing is still snarled up. The solicitor to whom I was speaking has said that on numerous occasions recently—he had 25 sets of papers yesterday—the bundle of documents is incomplete and the city estates and valuation officer is not providing the necessary material. That is the kind of delay that is not acceptable. Going beyond that, in two other cases, those of Mr. Small and Mr. Power, the acceptances of the offer were sent in, one in August and the other in October, but no response at all has yet been received.
I have indicated by referring to two authorities, but mainly my own, that there are still authorities where there is a less than enthusiastic response to the right-to-buy


procedure. It may be that the Supplementary Estimate which we are discussing will be insufficient and that other Supplementary Estimates may be brought before us. This is one Supplementary Estimate that the Minister should not fear to bring before us because it is likely that he will be able to recoup the amount from the council concerned. He has played a major part in producing the slow, steady spread of home ownership, a social revolution of great importance, and he must not under any account let the momentum flag.

Mr. David Stoddart: I, of course, would prefer that there was nothing in the Supply Estimates under this heading, since I believe, and have said a number of times in the House, that it is an imposition on local authorities that a Government should tell them that they must sell their houses, whether they like it or not and whether there is a real need in the area or not, and furthermore that they must sell them at a discount fixed by the Government and Parliament. I have never thought that to be a reasonable way to conduct our housing business.

Mr. Anthony Nelson: It is the law.

Mr. Stoddart: I am perfectly well aware that it is the law. I had some part in opposing the passage of the 1980 Housing Act through the House. I am still entitled to disagree with a law that has been passed by Parliament, and I shall continue to disagree with the Housing Act until it is repealed by the next Labour Government.
It is not my purpose today to attack the general provisions of the 1980 Housing Act. I wish to refer to an anomaly in the Act which has relevance within the Supply Estimates. The Minister has given notice to my local authority, Thamesdown borough council, that he intends to make an order under Section 23 of the Act to enforce the sale of part of Swindon's heritage, the Swindon railway village, which was built by the Great Western Railway Company between 1830 and 1840, having been designed by the architect of Paddington railway station, Matthew Digby Wyatt. The railway village represents the beginning of modern Swindon.
Undoubtedly, part of the money in the Estimates will be used to enforce the sale of these delightful restored houses to the sitting tenants. Many people in my constituency who would support the 1980 Housing Act and the right of tenants to buy are opposed to the enforced sale of individual houses in the railway village. My correspondence tells me so, as do my meetings with people from all walks of life in Swindon and the surrounding area, who are not in favour of selling off part of Swindon's heritage.
This was a unique development by the Great Western Railway Company, which not only built these houses to house its workers but also had the sort of arrangements for its work people that we did not achieve countrywide until the Beveridge Act. The Great Western Railway Company built all sorts of cottages for the lowliest of its workers and for the highest of its management. They all lived together in this community. The railway company also provided a theatre, a health centre, a mechanics institute where people could be educated and a church. In other words, the Great Western Railway Company provided a model village.
The village got into a state of disrepair. Because the Swindon people and the council realised its unique architectural and historic value, they decided to buy it lock, stock and barrel and restore it. That has been done magnificently. Everyone who goes there, even Ministers of the Crown, agrees that it is unique and that the local authority has restored it with loving care. The council has been enlightened enough to spend some £3 million on the restoration of the village. Therefore, there was a unanimous decision by all councillors and not just the Labour members that the unity of the village should be preserved and that individual houses should not be sold off. It therefore opposes the Government on that aspect, although it has agreed to sell houses under the provisions of the 1980 Act, and is doing so.
My colleagues—colleagues not in a political sense but in a parliamentary sense—the Members for Devizes (Mr. Morrison) and Chippenham (Mr. Needham) have joined me, the council and the people in opposing the sale of the houses. They have written to the Secretary of State and the Minister, as I have. I promoted a Bill, which was sponsored by the hon. Gentleman. Unfortunately, there was an objection to it, so it did not obtain a Second Reading.
We still believe, in spite of the Government's intransigence, that it would be an act of environmental vandalism to allow individual houses in the railway village to be sold off. I cannot believe that Ministers are so philistine that they would allow the selling off of individual houses in the village and so risk its future as a beautiful entity which is Swindon's heritage. I had thought that the present Government believed in the nation's heritage and wanted to preserve it, but risks are being taken with a delightful development which was saved by the people of Swindon. The village has won a number of awards, includng a Civic Trust award. I do not believe that the Government, and the Minister for Housing and Construction in particular, can use their powers to risk the destruction of the development as an entity. We have shown, by photographs and by reference to other areas, what can happen to such a development if it is allowed to go into individual ownership.
We are not asking for a great breach in the Act. We are asking for a simple amendment which would preserve our great railway village in Swindon and other such developments—there are not many of them—throughout the country. I believe that even at this late stage, after his threatened use of section 23, the Minister should have second, third, fourth, fifth, sixth, even tenth thoughts, if necessary, so that he can satisfy the people of Swindon, preserve our heritage and save the railway village as a unique historical entity.

Mr. Michael McNair-Wilson: I congratulate my hon. Friend the Member for Manchester, Withington (Mr. Silvester) on initiating this debate.
I support the Estimate, for I support the Housing Act 1980 and therefore necessarily I support the concept of the tenant's right to buy the dwelling in which he lives. I am delighted that the Estimate empowers my right hon. Friend Secretary of State
to intervene to enable secure tenants of certain dwellings to exercise their right to buy under that Act".
The point that I wish to raise concerns a very local matter. In my view it is a matter of natural justice, a


concept which is perhaps not easy to define but which for the purposes of my speech I shall define as the concept of fairness between one tenant and another. I suspect that my hon. Friend the Minister will know the point that I wish to elaborate on. I hope that he will forgive me for raising it on the Floor of the House. I do so because I cannot satisfy myself that those of my constituents who are suffering as a result of the anomaly to which I shall refer deserve to continue to suffer without their complaint being voiced to my hon. Friend in this most public way.
There are in my constituency many houses that at one time or another have belonged to the Ministry of Defence, because in west Berkshire we have a large number of defence establishments. Many of the tenants of those houses have lived in them for up to 20 years, and some for even longer. In 1950 the Ministry gave the tenants the opportunity to buy their houses, but at that time most of them did not have sufficient funds, so they continued to live in them as tenants.
In 1977–78 the tenants were informed that their houses had been transferred to the Property Services Agency. They were also told that the agency's task was to offer the houses to the Newbury district council, not to the tenants. The agency duly did so, and the houses were bought by the district council.
When the Housing Act 1980 was implemented, the tenants, some of whom had lived in Ministry of Defence property for more than 20 years, who had seen it become Property Services Agency property and then Newbury district council property, were told that as council tenants they could buy the houses as if they had newly entered into them. In other words, they were to be given a discount of 30 per cent. which is available to any council tenant who has lived in a council house for three years or more.
Not unnaturally, the tenants felt that that was a hard decision, and some of them came to see me. I have seen between 12 and 20, each of whom has said "Surely after all the years that we were tenants of the Ministry of Defence we should have been allowed an increased discount for that period."
I have written to my hon. Friend the Minister, and he has replied most courteously, but he has made it quite clear that there can be no change in the tenants' position. However, perhaps my words or my letters had a slight effect on him, as last year my hon. Friend the Under-Secretary of State for the Environment wrote to me to say that a variation would he introduced—that those who had not entered into the purchase of their houses from the district council and who had been tenants of the Ministry of Defence could claim from the council a discount in line with their total period of tenancy. I was overjoyed to receive that letter, but on first reading I missed the bit saying that the decision applied only to those who had not completed the purchase of their house from the district council.
That is anomalous. If my right hon. Friend the Secretary of State and my hon. Friend the Minister are pressing councils to sell their houses to tenants, it seems to me unfair that they should then, having put on that pressure, tell a group of tenants who seize the opportunity to buy from a willing council, "Although you are on all fours with this other group of tenants, the fact that they have been slow in coming forward to buy their houses means that they will receive a considerable financial advantage." Therefore, I ask my hon. Friend to reconsider that decision.
I do not know how many houses are affected. Between 12 and 20 tenants have been to see me and many more have written, but I doubt whether more than 100 tenants are affected overall. There is a strong sense of grievance among those who have bought their council houses and a feeling that they are being treated less than equally with those who have been much slower in coming forward.
Council tenants bought their houses with a controlled freehold and if they choose to sell in under five years from the original purchase date they must, in the first instance, offer the house back to the district council. Am I right in thinking that perhaps their purchase is not entirely complete and that there is a loophole which would allow them to claim a discount compatible with the period in which they lived, first, in Ministry of Defence houses, secondly, in PSA houses and now in district council houses? Mr. Speaker, I am grateful for your tolerance in letting me raise a point which has caused a great sense of grievance.

Mr. George Cunningham: The last words spoken by the hon. Member for Newbury (Mr. McNair-Wilson) puzzled me. I am not sure whether he was talking about the conditions applying generally under the Housing Act 1980 or to the particular operation in his area. He seemed to suggest that there is a limitation on the purchaser during the first five years who has to offer the house back to the local authority. Perhaps I missed something, but I believe that the only repercussion upon the purchaser who sold within five years was that he lost the discount—one fifth per year for five years—and that the arrangement whereby a local authority had a right to pre-emption during a certain period did not apply. Perhaps I misunderstood the provisions of the Housing Act 1980.

Mr. Michael McNair-Wilson: I quoted facts given to me by the tenants, and perhaps those particular houses come within the five-year rule which does not apply generally. There is a controlled element in the freehold of those houses.

Mr. Cunningham: I am sure that the Minister will be able to confirm the point. At the close of his speech the hon. Member for Manchester, Withington (Mr. Silvester) congratulated the Government on making giant strides towards home ownership. May I get across to him, and hopefully other members of the Government, that whatever they may or may not have done towards spreading home ownership they are about—without knowing it, and I doubt whether many Ministers are aware of it—to impose in the Finance Bill a considerable disadvantage on initial home purchasers by the alteration in the administrative arrangements for giving tax relief on mortgage interest. I will not go into detail because it is not the main subject of the debate, but it bears upon it because anyone who buys his house from the local authority under the terms of the Housing Act 1980 will normally buy it under a mortgage. He will be as affected by that particular arrangement as anyone else.
During the past week or two home purchasers have been the beneficiaries of a 1½ per cent. drop in the rate of interest. When the change which the Government propose to make in the Finance Bill becomes law and the building societies implement it in the manner in which at the


moment they are minded, the effect will be as if the interest rate rose again by about 1½ per cent. The Government have their heads stuck in the sand about that. They say that they are only changing the law and that the manner of implementing it will be entirely up to the building societies. They are absolutely right.
I am glad to see a Treasury Minister, the Economic Secretary to the Treasury, the hon. Member for Knutsford (Mr. Bruce-Gardyne) walking in. He will be familiar with the consequences of changing the arrangements for mortgage relief in the Finance Bill. If things go ahead as planned, a disadvantage, equivalent to 1½ per cent. on the mortgage rate, will happen in April 1983. That is a significant year if one wants to clobber the home-owner. It will clobber the new purchaser particularly seriously, but it will also hit every other home-owner who has a mortgage loan except those within 12 months of repaying it. It will increase the net monthly payment and burden by something which will vary considerably but which on average will be about 5 or 6 per cent. I see the Economic Secretary to the Treasury shaking his head. That is why I say that the Ministers have not looked into that point. They have their heads stuck in the sand, but they will wake up when they realise that the political consequences are indeed serious.

The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): I must say to the hon. Gentleman that I believe he is slightly misleading the House. The point, which has been discussed before in an Adjournment debate, is that what happens to the mortgagee depends entirely on the form of mortgage. If it is a fixed price mortgage, the position will be unchanged. What happens will depend entirely on competition between building societies and other lenders. We cannot predict what the market will dictate. We shall have to see.

Mr. Speaker: I believe that the hon. Member for Islington, South and Finsbury (Mr. George Cunningham) is straying on to the Finance Bill rather than the Estimate that is before us.

Mr. Cunningham: I will not pursue the matter further except to say that when the Economic Secretary to the Treasury refers to a fixed-price mortgage I take it that he is referring to an endowment mortgage. I accept that an endowment mortgage will not be affected but that a repayment mortgage will. Three-quarters of mortgages are repayment mortgages and I invite members of the Government to look at that point and read the Adjournment debate because he has it wrong. Whether he is right or wrong, the political consequences will be significant.
The hon. Members for Swindon (Mr. Stoddart) and for Newbury (Mr. McNair-Wilson) drew attention to consequences of the legislation which have a bad effect in their particular localities. It is one of the consequences of imposing obligations on local authorities and entirely removing their discretion. They cannot reflect local circumstances, and the example quoted by the hon. Member for Swindon is particularly poignant. Only the local authority knows the local situation and can take it into account when deciding whether to sell. It is that consideration which makes it wrong to remove the discretion of local authorities. When one says something

like that, the Government normally fling back the subject of education and say that people who want to remove local authority discretion in regard to education should not ask for local authority discretion with regard to housing. There is a difference. People have different policy attitudes to issues such as comprehensive education. But the desirability or not of it does not depend particularly upon local circumstances. The desirability of selling, or not selling, council houses depends very much on local circumstances, whether involving a local feature such as that to which my hon. Friend the Member for Swindon has referred or the local considerations that apply in my area.
In the foothills of the Barbican, there is a large estate that belongs to the City of London corporation. The corporation likes to build banks within the territory of the City and also new Barbican centres and the like that raise large rate revenue. It does not want to have its own housing within its own boundaries. It therefore has about half its extra territorial housing within the Islington borough council boundaries. While the City gets the rates from the banks, we in Islington get only the much lower rate revenue from housing. We do not even have the right to nominate to the City for a single one of the places there. I worked out, at one time, that the City should pay Islington £14 million a year to compensate for this loss, but the idea did not find favour even with the previous Labour Government.
The consequences of this legislation for such an estate as I have mentioned in the foothills of the Barbican—I refer to the Golden Lane estate—is that, as it is gradually sold, it will become a sort of mini-Barbican. People who cannot afford the very high prices of a place in the Barbican will be able to afford a place in Golden Lane from one of the tenants who has managed to buy it as a sitting tenant. It is a rather desirable housing estate within Islington.
Gradually, the Islington borough council—the same goes for the City corporation—will be left with the bad accommodation and none of the good accommodation. This means that housing in an inner city area such as that which I represent will become welfare housing and not council housing of the quality and nature that has existed up to now. It was for that kind of reason that the City corporation was against being obliged to sell off its accommodation. The corporation, as I think most people will agree, is not dominated by Socialist members.
I wish particularly to intervene in the debate to raise with the Minister a matter that has been brought to his attention in correspondence by Islington borough council. It points out the folly of the unbending nature of the legislation. A council tenant in Islington, who has the right to buy the place where she is living with a considerable discount, gave notice that she wanted to buy. Without any further stage having taken place, she put the place, which still belonged to Islington borough council, on the market. She advertised it for sale at a price that was not only well above what that person was going to have to pay for it after receiving the benefit of the disount but also considerably above the undiscounted price.
The asking price for the place would, no doubt, not be achieved. It is, however, normal for the market to produce a price that is higher than the estimated market value put upon the place. Here, we have a person who is buying a place in order to sell it and who advertises it for sale before she actually owns it. Islington borough council has


suggested to the Minister that this is not an arrangement that should be tolerated or allowed to continue. But the Minister does not agree.
I suggest that the matter brings out the disadvantages of legislation that removes entirely discretion from local authorities. Even if the Minister does not accept what I say, I put it to him that the representations made by Islington borough council are valid and that some amendment of the law should be made in order to prevent that kind of thing from happening. A reversion to the practice whereby, for a period of years, the seller was obliged to offer first to the local authority would be one means by which the abuse—it must surely be called an "abuse"—could be terminated.

Mr. Allen McKay: The hon. Member for Manchester, Withington (Mr. Silvester), who has raised this subject, said that he welcomed the amount of money in the fund. I cannot accept what he says in the same spirit. It means once again that central Government are interferring with the affairs of local government. I have always believed in the freedom of local government to determine exactly what the electorate wants. It is the electorate that puts the council into power on the basis of certain policies.
The electorate in the area that I represent has voted overwhelmingly and consistently against the sale of council houses. I accept, however, that a number of people wish to purchase their own homes. This is one of the bargains of the century. Houses are brought within the reach of people who probably would not have been able otherwise to afford to buy a house, but it is also a means of selling the seed corn of the housing of the local authority.
Housing can probably be placed within three bands. In the worst band, there are properties that probably need modernising or, in some cases, pulling down. The middle band consists probably of houses built pre-war that have been fully modernised and represent an exceptional bargain. The third band consists of newly built houses that are probably too expensive for many people to buy. This is shown by the large number of people who ask to buy their houses only to decline the purchase later when they realise that the price, combined with rates, will be too high.
The authority in the area that I represent has a pool rented system. Any decision to sell the middle band of housing means selling houses that would be bought completely in a short time. The rent income from houses that would normally have gone into the pool to help pay for new houses and also to keep rents low in the new houses would not exist. The authority has therefore been obliged to sell houses that it did not want to sell in the first place. It also means the loss of financing for future houses. This will cause a number of problems.
Councils know their locality better than anyone. The will of central Government is being imposed. Authorities would have come round to selling council houses. Those in my constituency, while not wishing to sell council houses, were emphatic that once there was a surplus, they would sell council houses. Before 1974, I was a member of a small authority that examined the possibility of selling council houses and decided that by 1975–76 a surplus would permit such sales.
Unfortunately, local government reorganisation spoiled those plans of the small authorities as it spoiled the plans of many authorities. It caused something that has been called the "repair problem". The Barnsley authority took under its wing roughly 13 small authorities which all had different housing probems, rent levels and methods of running their housing matters: some had a high rent policy which meant that their council house repairs were of a higher standard than those of authorities with a lower rent policy. The people in those areas decided on that type of council, but the large authority inherited these problems and it has taken considerable time to resolve them.
Another problem with the sale of council houses occurred when the Barnsley authority originally found that when tenants, seeking to acquire houses, wrote in, it did not have sufficient staff to cope. It took it some time to transfer staff from one department to another, but it eventually overcame the problem.
Sheffield has a major housing problem. Selling council houses does not help that authority to resolve housing problems. People live in high-rise flats and unsuitable houses that should not exist. When the Department of Health and Social Security liaises with housing departments, they must consider the problems involved in altering houses to suit handicapped persons. They are experiencing difficulties in that respect.
Another problem that both authoritie have faced concerns old people's bungalows. As I understand it, although that category of housing has been withdrawn from the category for sale, if someone gets a bungalow under retirement age or under the age when he might have a bungalow, it ceases to be one of the bungalows that are not for sale. That has stopped what used to be a very good scheme, allowing people under "bungalow age" to get bungalows that were probably not required for old people because there were too many steps. It gave them time to get rid of furniture and refurnish while working. Because of the sale of council houses, we have now had to do away with that scheme.
Will the Minister tell us what will happen about Airey-type houses? I am sure he knows about them and that they are predominant in my constituency. They must be replaced—they are not presently—because of the enhanced fire risk; not because they catch fire more than any other house, but because the spread of fire is more dangerous. Therefore, they are having to be demolished. Tenants from such buildings must be rehoused. If one adopts the wholesale sale of council houses, there is nowhere to put those people and insufficient money to build new houses because of Government policy. Hon. Gentlemen say that that policy is beneficial to local government, but I cannot understand how it is beneficial to local government to sell a house worth £20, 000 for £10, 000 and have to replace it with a house costing £25, 000. There is no way that one can resolve that problem.
There is a minor subsidence problem in the Barnsley area. About 84 prefabricated houses had to be demolished prematurely in my area and many other council and privately tenanted houses are in danger. The council has had to take responsibility for housing those tenants. If we had adopted the wholesale sale of council houses at that time, it would have created problems in finding places to rehouse those tenants. That policy, fortunately, did not apply at that time.
Council houses have not been sold because local authorities have been adamant that they did not want people to own houses; the contrary has applied. Labour Members wanted people to own houses and Labour policy, over many years, tried to encourage and help owner-occupiers and others to purchase their homes. My local authority decided, because it was unable to sell council houses, to encourage building for sale. We built special houses in an area that we could sell to ex-council tenants. Tenants were able to move out of existing council houses to those we built especially for sale. We also bought about 130 acres for mixed development. Part of that land was scheduled to sell at a fairly cheap price to people wanting to build their own houses. As a local authority, we put in sewers and road works free of charge.
The cost of that policy was borne, in general, by the ratepayers. Therefore, if there is to be a wholesale council house sales policy, one stops people moving from an unsuitable to a suitable dwelling, because one sells off the houses they need. One also interferes with the pooling system of rents; houses completely built by an authority were funded by future rents. In addition, people bought houses paid for by their predecessors, who, under a pool rented system, helped to build them and keep rents low.
For those reasons, local authorities decided that they did not want to sell council houses. However, they would have been encouraged to adopt policies for the sale of council houses to suit their localities rather then having them imposed by central Government. Therefore, I cannot welcome this money because it is certainly another imposition of central Government on local government.
All we have done on the sale of council houses is increase the workload of local authorities without giving them sufficient money to carry out their duties. That is another aspect the Minister must consider. When will the Minister make a decision about Airey-type houses? Will he compensate authorities, because they were built at the instigation of Government, to help them renew those houses? Will he consider the problems of these authorities before seeking to interfere with their right to determine their policies in accordance with the mandate from the people?

Mr. Peter Bottomley: I apologise for missing the earlier speeches; I was elsewhere in the House.
I pay tribute to the many people who work in council housing departments who carry immense burdens in the administration, allocation and management of properties and in trying to meet the needs and wishes of tenants. Too often, because of the difficulties associated with housing and especially municipal housing, they get all the kicks and none of the thanks. They are exposed to charges of inefficiency, scandal and all the rest. On occasion, such allegations may be true, but my experience has been that, in the main, most officers are dedicated in trying to help tenants and in doing the best they can under the prevailing system.
I regard this topic and debate as an extension of the gains that followed from leasehold reform. I would not presume to suggest, Mr. Speaker, that you have a view one way or the other on this issue, but the battle you fought over the reform of leasehold practice has led to a visible improvement, not only in the homes purchased since the

freehold is held by the people living in them, but also an immense change to the lives of people who were previously the leaseholders.
Having got their freedom, those people can now move and, if they wish, leave their homes to members of their family. Therefore, there is no suggestion of their being forced at the whim of a local authority or landlord to move. They have the opportunity of putting spare resources into improving their housing and do not have to rely on the decisions of others. Those matters apply equally to council tenants who have the opportunity by law, who have the money and who take the chance to own their own home.
The London borough of Greenwich owns over 40 per cent. of the homes in that area. In no way will building houses for sale in Greenwich make it possible for the same proportion of people to own their homes as in areas of Britain that were developed later. The growth in home ownership has come from new building and from the transfer of tenanted homes to owner-occupied homes both through the private sector and now even more through the public sector.
If the decision about whether to sell council houses were left to the local councils, it is clear from the actions of the present Greenwich council that it would not have allowed any tenants to buy their homes. That would have continued year after year and would have left the people who live in Greenwich only one option if they wished to buy their own home—to move outside the borough. It would have left Greenwich with a population that became relatively poorer compared with the rest of Britain, because owner-occupation tends over a time to be associated with a higher standard of living. I look forward to a development of the standard of living of council tenants, more of whom should be able to share the advantages of home ownership if they choose to follow that line.
Some special cases have emerged in Greenwich. Before I come to the general issues of Greenwich council's policy and what I hope the Government will require it to do—the Government should take over if the council does not come up to scratch—I wish to talk about four special cases which concern people who have been disadvantaged by Greenwich council's reluctance, and in some cases refusal, to sell homes.
The first case is a family with a mildly handicapped child. The child lives at home and is perfectly capable of living his own life as long as he is in surroundings where he is known. In time, that young person can be expected to live independently as long as he can go on living in his present home. The problem is that his parents are elderly council tenants and when they die the council will have the opportunity to, and under present policies will, require the surviving child to move. For that reason especially, the parents applied to buy their home. The council has delayed and delayed. I regard that as disgraceful in the circumstances, as well as totally wrong even if there was no special element involved.
The case of the second family ties in with the work and interest of the National Council for the Single Woman and her Dependants. It represents the adult who gives up a career of her or his own—it is usually a woman—to care for elderly dependent parents and who then finds herself disadvantaged not only because she is left without job experience when the parents eventually die but is often left at risk as well.
The couple of whom I am thinking gave up a home of their own and, with an elderly parent, took a council tenancy. That was a combination of two household units that came together in a council home and, because the elderly mother had been a council tenant previously, the fairly mature couple who were looking after her found themselves not with a joint tenancy but classified as dependants living in her home. For year after year they cared for the old lady. Then the elderly lady died and the council not only refused to take into account the years that the young couple had been paying the rent—they did not wish to apply for rent or rate rebates on the grounds of the mother's income but lived self-sufficiently—and did not allow them to buy the house, but wished them to move out of the home because they were not the official tenants.
The third example is of two brothers who again had lived with an elderly parent for many years. One of the brothers had lived in his father's house all his life. The second brother had moved away and had then come back to help to care for the father. When the father died, Greenwich council required them to move from their family home. I can understand—although I do not always agree with it—that if someone has come to live with a council tenant for a short time the council might say that he must move to another home. But to ask someone in his fifties who has lived for 50 years or even 30 or40 years, and who certainly for the past 10 to 20 years has cared for an elderly dependant, to move from one house to another is despicable and wrong.
The fourth special case is of an elderly lady who applied to buy her house on the first day that she was allowed to do so under the Housing Act 1980. Her children were to provide the money and pay the mortgage. Greenwich council did not within four weeks admit her right to buy. It followed its policy that it would have nothing to do with the Housing Act 1980. It said that, although it had a legal duty to sell homes to those tenants who wished to buy, it would do nothing. Eleven months after the elderly lady put in her application, she died. Her children are now severely disadvantaged compared with their position had Greenwich council carried out its legal duty under the Housing Act. I shall not allow that matter to rest and I should be grateful for advice from my hon. Friend, if not this evening at some other time, as to what action the family can take to put right the disadvantage that the council's actions have caused.
I have argued, in the House and elsewhere, for the Government to step in with Greenwich council. It has been spending much money on legal advice to see how it can keep one jump ahead of the law. It has obviously failed to do that because I have given an example where it clearly fell far behind. It must also keep one jump ahead of the Department of the Environment. I am grateful for the efforts that my right and hon. Friends have made in pursuing Greenwich council, as they have other councils. I am also delighted to see that the Department of the Environment has summoned Greenwich council to see it tomorrow and will require or expect the council to commit itself to a much faster programme of issuing section 10 notices so that it is up to date by the end of next month. Secondly, the Department of the Environment will require Greenwich council to get moving on the sale of flats.
It seems to me disingenuous or naive at the least for anyone to argue against the sale of council homes on the ground that only the most desirable properties will be purchased by tenants, and then to see Greenwich council

refuse to sell flats which are generally regarded as less desirable. When I was looking for a home to buy in London, I bought one that my local council wished to knock down because it was in such bad condition that it believed no one should live there.
There is a market price for even the worst accommodation in the worst area of London. Many living in the less desirable flats and homes would be well advised to find out what the market price is and to buy their property from the council. In that way we shall be able to avoid many problems that local authorities are facing in trying to do up or replace bad and deteriorating homes. The only way to rejuvenate many of the less desirable estates or areas of London is to bring in extra resources, and, if that requires a low market valuation, that is what the market will bear. Many young couples come to me to ask where they can get a home. Many of them would like to be able to buy a low-value property and put their efforts and resources into doing it up.
The main issue is the blatant disregard by Greenwich council of its obligations under law to its tenants who want to buy. Even if every tenant who wanted to buy his home this year had done so by the end of the year it would not make a significant difference to the Greenwich housing stock. Nor will all the desirable homes be bought by tenants. Many of the most desirable homes are occupied by elderly people who have no interest in buying. Re-lets will still be available. What matters is that those who put themselves up for election as councillors should recognise their responsibility to uphold the law and their responsibilities to tenants.
I hope that my hon. Friend will be able to tell me, not only this evening but after the meeting tomorrow with Greenwich council, that those tenants who want to exercise their right to buy will be able to do so and to become owner-occupiers and estate holders in their communities, and that many more in years to come will be able to exercise the same option. Obviously, councils have a duty to help in meeting housing needs, but that duty does not extend to maintaining a close grip on all the homes that all their tenants live in.

The Minister for Housing and Construction (Mr. John Stanley): I am sure that the House will be grateful to my hon. Friend the Member for Manchester, Withington (Mr. Silvester) for being so successful in the arrangements for the Consolidated Fund debate and giving us an opportunity to debate an issue that has aroused great interest on both sides of the House. Although the House is relatively thin at the moment there is no question but that the Government's legislation on the right to buy is of the most profound importance to many hundreds of thousands of families up and down the country who are seeking to take advantage of their rights under the legislation.
I shall deal with the specific points made by hon. Members about their individual constituencies, but the House may be interested to know now that approximately a year and a half has passed since the right to buy took legal effect, what the progress has been since that date, and the response to the legislation. Nearly half a million tenants have applied to exercise their right to buy and that is as eloquent a demonstration of the widespread support for the policy as one could have. Already nearly 100, 000 tenants have successfully been able to complete the purchase on their homes. Taking into account the large


number of voluntary sales that have taken place, at the end of last year nearly a quarter of a million local authority dwellings have become owner occupied since the Government came into office. I am confident that during the course of the Parliament we shall be making a giant stride in the widening of home ownership.
In the process, we shall be bringing enormous personal benefit, as my hon. Friend mentioned, to many hundreds of thousands of former tenants and their families. We shall also be unlocking capital receipts in respect of the stock that is sold. Local authorities will be able to use and are using that on a large scale for their benefit by ploughing the money back into their housing programmes.
My hon. Friend the Member for Withington asked whether the money voted could be recouped by the Secretary of State from the local authority which eventually spent it. I assure him that there is provision in the legislation for recoupment as described. In principle, the answer to that question is "Yes".
The hon. Member for Swindon (Mr. Stoddart) raised an issue that he had been assiduous in raising both during the gestation, and since the enactment, of the right to buy. I understand that he feels strongly that the houses in the railway village in Swindon should be excluded. The Government consider that those properties should not be excluded. I am not referring to the railway village per se, I am saying that simply because a dwelling has a particular architectural merit, or because it is located in a conservation area, that is not legitimate or reasonable grounds for denying the occupants of those dwellings the right to buy.
The Government's reasons for doing this were set out fully in a letter written by my hon. Friend the Under-Secretary of State for the Environment to the leader of the Thamesdown council on 19 August 1981. He set out in considerable detail all the powers available to local authorities under planning and conservation legislation whereby they are able to take steps to control the changes in the appearance of dwellings in the kind of area encompassed by the railway village houses.
Having said that, the issue that is before the House, and particularly the Secretary of State, is whether those tenants in the railway village, who have the unquestionable legal right to buy their homes—and the hon. Member has never denied that—under the 1980 Act will be able to exercise the right given to them by Parliament, or will not be allowed to do so for some reason. The Government's view is that, without any question, those tenants must be able to have their entitlement to their legal rights as agreed by Parliament. That is why the Thamesdown council was formally warned on 1 February 1982 that the Secretary of State was contemplating the serving of a notice of intervention on that authority in respect of those dwellings. I make it clear that that represents a serious step. The Government are firm in their view that once Parliament has given a clear legal right, that right must be upheld. I trust that the borough of Thamesdown is taking that letter seriously.
My hon. Friend the Member for Newbury (Mr. McNair-Wilson) raised a problem with which I am also familiar. He has been extremely energetic in seeking to uphold and protect the interests of his constituents. He has the difficult problem of seeking some arrangement whereby the statutory discounts provided under the

Housing Act 1980 can in some way be altered to benefit those people who bought their homes when those discounts did not apply. We have had to take, although we have much sympathy with my hon. Friend's point, a clear view of this. Many thousands of people have bought their homes over the years, under whatever was the legislation, and in particular under what were the general consent arrangements at that time.
Right through the 1960s, 1970s, the early part of 1980, and up to the time that we issued our new general consent in May 1979, many people bought—some at market value, some at 20 per cent. discount, and a few were fortunate and took advantage of the 30 per cent. discount arrangements which were brought in by the previous Conservative Administration. My hon. Friend made his case in the most compelling manner, but if one accepts the principle that, when a contract has been entered into and a purchase made, notwithstanding that, one should basically re-open the contract to give his constituents the benefit of the greater discounts, I should have no reasonable ground for not doing the same thing for other hon. Members who wished me to do exactly the same thing for their constituents.
We issued our new general consent in May 1979—within a fortnight of our coming into office—and people bought within the first week. Some people had bought in April 1979, a few weeks before we issued our general consent. They had bought at 20 per cent. and 30 per cent. discounts. They said to us "I have only just completed my sale. I have owned my home for only a few weeks. You have now produced new discount arrangements, and I could have had 50 per cent. discount if I had not already bought my house". We had to tell them that, as the contract had been made, there was nothing that we could do. The existing contracts had to stand.
I am sorry to reply to my hon. Friend in this manner, because he could not have argued the case on behalf of his constituents more persuasively. However, he will appreciate that if we made the concession to him we should have to open up every sale that had been made under voluntary arrangements over a long period.
I assure the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on the first technical point that he raised. The Housing Act 1980 did away with the previous pre-emption system. Although there is provision in the 1980 Act for pre-emption to be imposed in certain special cases—for example, in certain rural areas—the general principle that we followed is to move to a discount claw-back system; and as the hon. Gentleman rightly said, that is based on a return of discount of 20 per cent. a year, after each complete year for the first five years after the sale takes place.
I was delighted that my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne), the Economic Secretary to the Treasury, came into the Chamber when the hon. Member made his intervention on the implication of the option mortgage system. I followed what he said in his Adjournment debate, and what he said today, and also what my hon. Friend said. It is a matter for my Treasury colleagues, but the hon. Gentleman took the further opportunity today to raise this matter to which he attaches so much importance. I welcome the spirit in which he raises the issue, in an endeavour to assist people who are buying their homes, particularly people who do not have high incomes.
The hon. Member for Islington, South and Finsbury raised the matter of valuation in a particular case. The matter was also raised by representatives of the Islington council, when they came to see me many months ago. There is no need to amend the legislation. The position is clear: people buy at the full open market value of a property, less the amount of discount. They do not get the benefit of that discount—which is the potential profit element—for at least one year after applying to buy their home. That seems to protect fully the position of the public purse.
The hon. Member mentioned a particular case in which someone advertised a property that he did not own. We live in a free society, and no one can prevent anyone from offering for sale property that that person does not own. The important thing is not so much what people do by way of advertising but what happens in reality and the basic equity of legislation. When a full open market value is provided, and that is laid down in legislation, and when the whole discount has to be returned for the first year after the sale takes place, I cannot accept that there is the general scope for abuse to which the hon. Gentleman referred.
The hon. Member for Penistone (Mr. McKay), like the hon. Member for Islington, South and Finsbury, was concerned about the principle of the right-to-buy legislation. He wanted to make a Second Reading speech on the right to buy. Perhaps I should make my Second Reading speech in reply. We take a different view on the pattern of sales that will take place. What my hon. Friend the Member for Woolwich West (Mr. Bottomley) said was right. The general experience of the house market is that every dwelling, however attractive or unattractive, has its price. By definition, the less attractive dwelling will have the lower price, and will be within the range of more people. The most eloquent evidence that the best houses will not be sold is provided by homesteading schemes, which have been carried out successfully in London and by councils throughout the country. They showed dramatically that people are willing to buy derelict and vandalised properties, pay an appropriate price for them, and do them up themselves.
During the past two or three years, I have had the pleasure of visiting a number of estates, new towns and local authorities where homesteading has taken place. I have seen the state of properties before they were put on the market, and I have been inside a number of houses which have been bought by young people in a highly dilapidated state and I have seen what has been done to them. It is a great tribute to people's imagination and willingness to help themselves. Some of the houses and flats, which a year or two previously were vandalised and dilapidated, have been turned into palaces. So there will be a reasonable spread of types of dwellings that are sold.
The hon. Gentleman for Penistone also raised two specific issues. He spoke of the financial effect of the sale of council houses. It looks as though Barnsley will be somewhat underspent this year. Given the substantial weight of sales that have taken place in Barnsley, I am sure that he will do all that he can to make certain that Barnsley council will fully utilise its capital allocation and the substantial capital receipts which are coming in and which will come in when the 5, 000 or so sales applications that it has received are completed.
The hon. Gentleman also mentioned Airey houses. I know what happened in Barnsley, because that is where

the initial fire occurred which led to the detailed surveys that were carried out into the condition of that property. We shall consider applications for Airey houses that local authorities make to us in the course of their HIP returns for their 1982–83 HIP bids. It is legitimate for a local authority to say that as part of its capital investment programme it wishes to do the following redevelopment of Airey house estates, and so on. We shall, of course, consider authorities' plans for capital expenditure on Airey houses, in conjunction with our general evaluation of local authority individual bids.
I am familiar with the problems of the constituents in Greenwich of my hon. Friend the Member for Woolwich, West. I am sure that his kind comments about the housing staff of local authorities will be much appreciated by the staff, and I fully endorse what he says. This is one of the more difficult social service areas. Housing staff have difficult problems to wrestle with, and there is a high level of commitment to the work that is done in local authority housing departments.
My hon. Friend the Member for Woolwich, West referred particularly to Greenwich, and I acknowledge the forceful, effective and consistent way in which he has, over the past 18 months, given outstanding support to the tenants in Greenwich who have sought to exercise their right to buy. I was disturbed by the personal cases to which he referred. Knowing in detail the history of that authority in dealing with right-to-buy applications, the personal circumstances he cited did not surprise me. As regards the cases to which he referred where people are experiencing difficulty in exercising their right to buy—particularly the serious delay for an elderly couple with a handicaped child—I am sure that if he has not already done so he will submit details to my Department. He knows that we pursue every case that is taken up.
The general position of the London borough of Greenwich, is causing deep concern. I must express the strong dissatisfaction of Ministers over the way in which Greenwich has so far implemented the right-to-buy legislation. My right hon. Friend the Secretary of State will be meeting officials from the London borough of Greenwich in that connection. As my hon. Friend the Member for Woolwich, West knows, the London borough of Greenwich has been formally warned that the Secretary of State is contemplating the use of his powers of intervention.
Finally, I come to the contribution of my hon. Friend the Member for Withington. He is correct in saying that initially we had some difficulty on the operation of the right to buy in Manchester. He referred to the leaflet distributed by Manchester council that was to some extent designed to dissuade tenants from exercising their right to buy. I am glad to say that the leaflet had singularly little success. Manchester council has received nearly 7, 000 applications from tenants who wish to buy their homes. Following formal representations which my Department made to Manchester in the early part of last year, the council has begun to make better progress and by the end of Februray this year about 95 per cent. of the tenants whose right to buy had been admitted had received their section 10 notices.
However, we are becoming increasingly concerned about the rate of completion of sales in Manchester. Although over 1, 400 tenants had completed the purchase of their homes by the end of February, that represented one-third of the number of tenants who have told the


council that they wish to proceed with the purchase of their houses after receiving a section 10 notice. At the end of February, nearly 4, 200 tenants had accepted the council's offer of the purchase price, so there was a large backlog of applications between acceptance and completion stages.
We have received evidence from tenants of serious delays to the completion stage. By the end of February we had received 56 complaints from tenants in Manchester about delays in handling their applications at the completion stage. Of those, 20 were received in February and 14 in January this year. Correspondence received from tenants or their solicitors shows that in some cases tenants are being told that it will be between 21 and 31 weeks before they can expect to hear from the council. That is not acceptable. I can tell my hon. Friend that my Department has taken up the issue of progress with Manchester council. We wrote formally to the council on 4 March asking detailed questions about its resources for completing sales and also about the measures it proposes to take to accelerate the rate of completions. We are awaiting the council's detailed reply. However, the chief executive has told us that he is making progress in reducing the backlog. In fairness, and to give the complete picture, the chief executive also said that over 1, 400 offers had been made for which, so far, no response had been forthcoming from the tenants concerned. In those cases the ball is firmly in the tenants' court.
I am extremely grateful to my hon. Friend the Member for Withington for giving the House the opportunity to debate the question of the right to buy and for bringing a number of cases in Manchester and the general problems there to our attention. I thank him for the excellent work that he has done on behalf of tenants in the city of Manchester in supporting them and giving them all possible assistance in exercising their legal rights. I assure my hon. Friend and the House of the Government's unshakeable commitment to ensure that all tenants, whether in Manchester or in any other authority, who have the legal right to buy their homes and wish to do so, succeed in becoming home owners.

Orders of the Day — European Communities (Budget)

Mr. Richard Wainwright: I raise the matter of wholly unprecedented expenditure that should not have been made without the express approval of the House. It is covered by Class II, Vote 12.
Parliament seems virtually poised to recover after more than 50 years its key role of fully debating Estimates for future Government spending, which, after scrutiny by hon. Members, appear to be questionable. That new vitality in the House springs from all parts and has already given rise to big changes in parliamentary procedure.
It has been inappropriate and insensitive for the Government to use the back door method of the Contingencies Fund in the last two months to pay to the European Communities about £7 million, the legality of which is being contested at the European Court of Justice.
The Select Committee on the Treasury and Civil Service reported unanimously to the House this week that
the right course for the Government then to have taken would have been to present an immediate supplementary estimate on which the House could have taken a decision. This would have been preferable to making use of the Contingencies Fund.
That is the first point that I wish to put to the Minister. I am sure that he will bear in mind that the Treasury evidence ably given to the Select Committee revealed clearly that there was considerable and understandable uncertainty in the Treasury and the Foreign Office about the proper procedure.
The second and perhaps substantive point on which I question the Government's wisdom is the paying of that large sum before the European Court has heard the case, which is that the whole amount has been levied by the EEC illegally. The House has not yet had any satisfactory explanation for the highly unusual procedure of making payments that the payer regards as illegally levied and which are being contested in a court of justice. Those payments have not been made to an independent stakeholder nor, so to speak, are they payments "into court", but they are payments made to the European Communities, which, it is claimed, have levied them illegally.
That is a matter on which such actions undoubtedly set precedents. For example, in the examination of witnesses from the Treasury by the Select Committee on the Treasury, and Civil Service, a member asked:
You say that we are in an unprecedented situation, so what is done in this case is not without importance as far as the future is concerned?
The Treasury official replied:
That is correct.
The House should have had an opportunity to debate a matter that would set a precedent in a novel and untilled field.
Our Government, through the rest of the Council of Ministers, are asking the European Court to find that last December the EC Assembly adopted a 1982 budget, the total of which was over the maximum increase allowed under Article 203·9 of the Treaty of Rome, and also that within the disputed total, the food aid item had been illegally increased by the Assembly.
The combined amount in dispute—subject to exchange values—is approximately £27 million, of which over £7 million is being paid in the current fiscal year. The balance will be payable under this decision in 1982–83 unless the


court puts on a great turn of speed and gives its decision before the monthly instalments have amounted to the whole sum of approximately £27 million.
The Select Committee on the Treasury and Civil Service has been told by Government witnesses that this large payment in advance of the court hearing was considered necessary if a unanimous Council of Ministers were to launch the case, as distinct from the British Government and perhaps other sympathetic EC member States though not all of them. The grounds on which the Government came to the conclusion that it was worth this substantial payment to have the case launched by the Council of Ministers rather than by the British and perhaps some other Governments have never been explained to the House.
There appears to have been a suggestion that the European Court of Justice would in some way be influenced by the nature of the body bringing the case, and there has been talk of the court having a more sympathetic reaction because of that. There may be justification for that view, but to the layman, who has not been allowed access to the facts so far, it seems odd that a great court of justice should be capable of having sympathetic reactions according to the status of those asking for justice. This raises the question of how the court proceeds and what its standards are. Such matters should be considered carefully by the House and decisions should not be taken by the Government alone.
In its report published this week, the Select Committee records its regret
that it has not been possible for the Government to provide a copy of the case as presented in writing to the court by the Council.
We understand that this is not the British Government's fault. It is a position taken by the Council of Ministers. Nor was the Select Committee given access to the legal advice on which the Government decided to take what is, on the face of it, a remarkable decision.
Equally important, the Select Committee could not be given any assurance that if the European Court finds in favour of the United Kingdom and declares that the Budget is illegal under the Treaty of Rome, the disputed money which the Government have been in such haste to pay over will be repaid to us with interest. Perhaps the Minister will be good enough to comment on that as well.
All Members who are concerned to recover parliamentary control of Government expenditure will regret that we have been able to debate this unprecedented matter only after payments have been made. However, it is better late than never. I hope that the Minister will comment in detail on the points I have made and, indeed, on the report of the Select Committee on the Treasury and Civil Service.

Mr. Michael English: By raising this matter the hon. Member for Colne Valley (Mr. Wainwright) has been kind to the Committee on which he serves. He was fortunate in the Ballot and he could have chosen any subject he wished, but he has rightly chosen this subject.
This must be one of the first occasions when the Consolidated Fund Bill has been used for its proper purpose. Today, we are debating, amongst other things, something that is being technically appropriated and approved by the Consolidated Fund Bill.
Usually these sums of money are used as pegs on which to hang discussions. In this instance the Select Committee on the Treasury and Civil Service has reported upon two unusual Supplementary Estimates. In respect of the EEC Estimate—the report also covers a rather unusual item relating to national savings as well—it is extremely odd that we should be subjected to this procedure. I say that in no criticism of the civil servants who came before us. They obviously acted perfectly properly both in the Treasury and in the Foreign and Commonwealth Office. They had consulted their lawyers and they told us so. Those lawyers had consulted the Law Officers and the Crown; and the civil servants told us that as well. [Interruption.]
In my view—I hope that my Front-Bench colleague will keep quiet—perhaps I should wait a moment. In my view, it is perfectly proper, perfectly accurate and perfectly well advised on the part of the Treasury and the Foreign and Commonwealth Office that they should not have paid this money directly out of the Consolidated Fund as the Act permits them to do if the expenditure is legal or lawful. It is extraordinary that it was paid out of the Contingencies Fund. The Financial Secretary to the Treasury, who is to reply to the debate, was a member of the General Sub-Committee of the Expenditure Committee in the previous Parliament. Almost the last act that that organisation ever did was to commission from a variety of lawyers throughout the United Kingdom their opinion of the validity of Contingencies Fund expenditure for a variety of purposes such as the one before us.
We were given—I regret to say that this is sometimes the way with lawyers—two different and diverse sets of advice. Half of the United Kingdom's most eminent constitutional lawyers think that the Contingencies Fund can be used for a variety of purposes and the other half think that it can not. There is clearly doubt about it and that has been admitted in evidence to the Select Committee on the Treasury and Civil Service by the Treasury itself. That is known to us and that is admitted.
The worrying feature is that the Government never brought this issue before the House of Commons. They merely assumed that the money could be paid out of the Contingencies Fund. They obtained correct legal advice that it could not be paid out of the Consolidated Fund and that it could not be paid under the European Communities Act, 1972. However, the assumption was made that it could be paid somehow.
The Lord Chancellor's robes have been paid for from the Contingencies Fund, and the atomic bomb has been paid for from the Contingencies Fund. As far as I am aware, Parliament was not informed in either instance. In this instance the money was paid from the Contingencies Fund on the assumption that eventually—perhaps in a week or two or a month or two or at some time when it was convenient—Parliament would just have it mentioned to it as a minor Supplementary Estimate. In years gone by that is all that would have happened. That is because there was no Select Committee on the Treasury and Civil Service.
The Select Committee on the Treasury and Civil Service has reported on this use of the Contingencies Fund. It has had to do so in photocopied form. It seems that these days the Stationery Office is not capable of printing anything for the House of Commons the day after it has been given it. It does so for the Government but not for the House of Commons. The report was issued


yesterday in photocopied form in the Vote Office to the press and to the public. I do not see how the public can get it if it is only in photocopied form.
This procedure is not good enough. When there is an argument—I shall not repeat the arguments of the hon. Member for Colne Valley because he has advanced them must properly and adequately—about whether money should be legally paid by Her Majesty's Government, and when we are talking of millions of pounds, I suggest that it might just be advisable perhaps to consult the House of Commons to ascertain whether it wishes to pay over the money in advance of the court's decision on whether it is lawful.
It may be lawful, although there is doubt about that, but it is certainly improper for the Government simply to pay money out of the Contingencies Fund, which was originally created literally for disasters—storms, tempests, destruction and Acts of God. Whatever else the EEC may be it cannot be described as an Act of God unless one has an awful and forbidding view of the Almighty. Money can be paid in to the Contingencies Fund by statute and there is no statutory authority for that. Money is paid out of the Contingencies Fund without a word to us. We were not asked to approve this money to be paid to the EEC. We are asked to approve the money being paid back to the Contingencies Fund. What an extraordinary world it is.
Strictly speaking, the House is not allowed to discuss whether we ought to pay the money in advance of the court's decision, although we have been able to do so with the aid of the hon. Member for Colne Valley (Mr. Wainwright). Strictly speaking, we are discussing the paying back to the Contingencies Fund of money that has already been spent without the approval of the House. That cannot be an appropriate procedure.
I am glad that we have the Procedure (Finance) Committee considering the control of public expenditure. Consideration and action are necessary. We are discussing a clear example in which money can be paid without the authority of Parliament from a fund from which no statute has ever authorised expenditure—the Contingencies Fund—for a purpose the legitimacy of which no one yet knows, although the Law Officers of the Crown have advised that it is not lawful. The House is asked not merely to authorise that but to pay back money to the Contingencies Fund on the grounds that that is a perfectly proper procedure. Such financial control if applied in the average company would be criticised by its auditors. At the moment, we are in the position of auditors of the United Kingdom in a non-professional sense. As auditors, we are criticising such financial procedures.

Mr. Hugh Dykes: It may be appropriate that an hon. Member who was not a member of the Select Committee should contribute to the debate. I hope that it does not embarrass the hon. Member for Colne Valley (Mr. Wainwright) too much if I congratulate him on raising this issue which is not only interesting but raises disturbing questions.
I was not surprised that the hon. Member for Nottingham, West (Mr. English) was able to argue that the grandest lawyers of the land are split down the middle and express diametrically opposed opinions. That is what we sceptical laymen expect from our grand lawyers when they

are interpreting complicated constitutional and financial matters. This is an important example of a case in which the House of Commons, alas, to many hon. Members, seems intrinsically weak vis-à-vis the Executive. Its powers of surveillance and scrutiny not only of expenditure—whether it be the matter immediately to hand, which may be an esoteric piece of expenditure or more general, legitimate and conventional expenditure—but of general Government policy, are limited. It has been a matter of some pain to many hon. Members that Parliament, which has a long history of priding itself on being a robust institution, is weak vis-à-vis the executive branch, to use the American phrase, in its ability to supervise these matters.
The development of the Select Committees offers some encouraging glimmers of light—I say no more as they are at an early stage—but this is an excellent example of an hon. Member with a distinguished reputation being able to raise an important matter. I am sure that I am equally right to say that the Minister will come up with some acceptable explanations of the Government's position on the matter. It raises two general points about the way that the House handles the scrutiny of EC matters.
I know that how we hold those debates and whether we should have them in Committee as well, as we now do again, is a separate issue, but the conceptual control side of the EC budget, not its strategy or its politics—how large it should be and whether the VAT ceiling will be reached in due course—is a complex matter. It is important for those such as myself who are enthusiastic about the EC to be reassured as the years unfold about a complex mechanism which is difficult to handle in an international environment, with the countervailing powers of the institutions impinging on it. The Commission is in a difficult situation. It is trapped between the Council of Ministers and the European Parliament which naturally wants, in a secular way, to increase its supervision of these matters.
It is important that that financial and control process is seen to be done properly both in the international context and in such a way that individual national Governments relate to the collective EC budget. That would involve improving the work of the Court of Auditors. I would love to hear the private opinion of officials in the Court of Auditors about this matter. Perhaps we shall have an opportunity on another occasion.
I end as I began. As a non-member of the Committee I find it useful I pursue this matter closely and I await the Minister's reply with interest.

Mr. Guy Barnett: The House must be grateful to the hon. Member for Colne Valley (Mr. Wainwright) for raising this matter. I congratulate him on his good fortune. I use those words advisedly; nobody knows who will successfully raise a matter on the Consolidated Fund Bill. There is no doubt that this is an important matter which should have been debated in the House.
The Lord Privy Seal, when making a statement on 3 February, said:
Of course it will be possible to debate the matter when the Supplementary Estimate is laid before the House."—[Official Report,  3 February 1982; Vol. 17, c. 306.]
We have been granted that possibility thanks to the efforts of the hon. Member for Colne Valley and his good fortune.


Surely that serves only to underline and illustrate the points that have been made—that the House ought to exercise some control over expenditures of this type but does not at present have the procedures to do so.
It is very important that we should establish such procedures, not least because of the case that has has been brought before the House today. I spent only a matter of months as a member of the European Assembly. Never during that time did it strike me as a body which even expected the responsibility to control expenditure. That is a responsibility which we grant ourselves but do not always satisfactorily fulfil. Hence, it seems all the more important that, whereas the European Assembly, if I may describe it in the technical sense as an "irresponsible" body, has voted to increase the budget in certain respects which, according to the constitution, may or may not be lawful, it nevertheless appears not to have the job of control which is the responsibility that historically and traditionally is ours. The debate has illustrated that point and several others with which I shall deal.

Mr. Christopher Price: My hon. Friend says that he spent only a few months at the European Assembly. I spent a whole 12 months there. Is he aware that I never felt so ankle-deep in uncontrolled money in my whole life?

Mr. Barnett: Many hon. Members who have spent time in that body will share my hon. Friend's opinion.
I also congratulate the Select Committee on its work. I have read both its report and the oral evidence that it took. I also congratulate it on the speed with which the report was provided for the House. Admittedly, it was published only yesterday and it may not have been possible for many hon. Members to study it. Nevertheless, the Committee took evidence on 1 March and the report was ordered to be printed on 8 March—I take the point made by my hon. Friend the Member for Nottingham, West (Mr. English)—and it has still proved possible through sheer luck for the House to consider the matter today. Although the Lord Privy Seal was questioned on this at some length on 3 February, I am sure that everyone agrees that it ought to be properly debated.
The hon. Member for Colne Valley (Mr. Wainwight) raised two main points. I shall deal first with the question of the lawfulness of the European Assembly's action. I, too, was greatly disturbed by certain remarks which were made by officials in good conscience. I in no way criticise what they said, because in many respects they repeated what was said by the Lord Privy Seal in his statement on 3 February, when he said:
We believe that a joint approach by the Council would be more powerful than an individual approach by Britain.
What kind of approach is that to the European Court? Indeed, what kind of body is the European Court? I am no lawyer and I have had no legal training, but I have always understood that the quality of the case and not the quality of the appellant was the deciding factor in determining whether a case was right or wrong.

Mr. English: Although my hon. Friend describes himself as a layman in terms of the law, he is trapped in Anglo-Saxon common law attitudes. That is indeed the attitude of most people in this country in relation to the law. We are here dealing with the Roman law system, which was developed in a very authoritarian empire in which the emperor's decision was law and which was

revised in another authoritarian empire by Napoleon, for example. My hon. Friend must appreciate that in the Roman law system the attitude of the authorities, of the executive or the legislature—in this case, the Council of Ministers is the legislature—is far more important than it is in the Anglo-Saxon system here, in America, or in the Commonwealth.

Mr. Barnett: I am grateful to my hon. Friend. I cannot personally judge whether he is right or wrong as I know little or nothing about Roman law. He will recall, however, that when evidence was taken by the Select Committee some very surprising statements were made by officials, of which I shall quote two to illustrate the reasons for my anxiety. Paragraph 31 of the oral evidence contains the suggestion that
the decision one gets out of the Court is affected in some way by whether the reference to it is made by the Council of Ministers as a whole or just the United Kingdom".
When that was questioned, there was the following very interesting reply, which highlights the position and the point that I wish to make:
It is a court, after all, which is judging a dispute which has occurred within the terms of this Treaty, which is a Treaty which is political as well as everything else.
That may be the clue to the problem.
One thing that I know about European law or about the way in which the court at Luxembourg works is that in making its judgments it is bound to take into consideration the preambles to the articles of accession and the rest, which is not the case under our system of law, and this is capable of leading the court to make decisions which would not be made in this country.
In the Select Committee's report, the point is again underlined. The report states that
the Government's view was that proceedings launched by a unanimous Council were more likely to produce a sympathetic reaction from the Court.
That is a most interesting and perceptive phrase.
The hon. Member for Colne Valley also raised the interesting point, as did others, that the payment is being made although it has not received the approval of the House. I shall not go into technicalities about the Contingencies Fund and the way in which it is administered or the purposes for which it is administered. I am prepared to admit that in the very exceptional circumstances that was the right step to take. Indeed, that was the opinion of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), who questioned the Lord Privy Seal on 3 February. Nevertheless, it strikes many of us as a remarkable procedure that although the legal opinion which apparently weighed heavily with the Lord Privy Seal was such as to suggest that the European Assembly's decision was not lawful, it was nevertheless decided to make the payment. Perhaps this was because it was recognised that the way in which the European Community and the Council of Ministers operate is such that one must give a bit and take a bit—that is, one gives a bit by making the payment on condition that the Council of Ministers will take up one's case with the European Court. That, again; highlights the unsatisfactory situation in which we find ourselves.
Finally, I refer to a point which, although it has been answered, has not been mentioned so far and should not be omitted from the debate. When I asked the Lord Privy Seal—I know that it is a somewhat theoretical question—what would happen if the House refused to sanction the payment, he replied:


Then we shall have to reduce our payments".—[Official Report,  3 February 1982; Vol. 16, c. 306–9.]
I am not sure exactly what those words mean, but if the House obtains the proper sanctions and scrutiny of payments of this kind that most of us would wish, we could run into a very serious situation in relation to European law. I am looking towards the horizon and assuming, although I hope that it will not be the case, that we shall remain in the EC. In those circumstances, we should run into a serious situation if the House really began to exercise the control over payments of this kind that many of us believe it should exercise. That is why I ask what on earth the Government would do, having made a commitment to the Council of Ministers, if the House of Commons subsequently refused to sanction it. That is the kind of problem that is likely to arise from the doubt about the relative power of institutions under the EC.
I have spoken to some whose opinion is that the European Court is likely to rule against the submission from the Council of Ministers on the grounds, first, that in making its judgments it takes into account the preambles to the treaties, and, secondly, that it regards as sacrosanct within the EC that which is communautaire.
I should be grateful for the Financial Secretary's response to some of the issues that have been raised by my hon. Friends, the hon. Member for Harrow, East (Mr. Dykes) and me in this debate. These are very important issues, and I am grateful for having had the opportunity to debate them.

The Financial Secretary to the Treasury (Mr. Nicholas Ridley): I, too, am grateful to the hon. Member for Colne Valley (Mr. Wainwright) for raising this matter. It is important and deserves the attention of the House.
I hope that the House will bear with me while I try to cover all the points that have been raised, but perhaps I might be allowed to do that in my own order. There is a logical sequence to the argument as well as to the debate.
It was a great sadness to me personally that, having been president of the budget council last winter, I was unable to secure an agreement with the Parliament on the budget. We very nearly made it, but at the last minute, by a small margin, the Parliament voted sums which were in excess of what the council had agreed to. My hon. Friend the Member for Harrow, East (Mr. Dykes) said that the United Kingdom Parliament was very weak and that it should strengthen its power to control expenditure. In my experience, the United Kingdom Parliament is much better at controlling expenditure than the European Parliament. Indeed, the European Parliament's main power is to increase expenditure. It is in that difference between the two Parliaments that one has first, the difficulty that we experienced last autumn and, secondly, the divergence between the two Parliaments in their functions.
I took the issue back to the Council on 21 December 1981. As a result of that meeting, we sought discussions with the Parliament to see whether we could negotiate a settlement of the dispute. However, after the Council meeting, the President of the Parliament adopted the budget without further ado and the situation that we are now discussing arose.
It so happened that the next Council meeting was on foreign affairs on 26 January 1982 when my right hon.

Friend the Lord Privy Seal represented the United Kingdom. The Council decided what it should do in response to the Parliament's decision to adopt the budget. My right hon. Friend found that unanimity could be achieved only if all members of the Council paid the disputed extra in full, and, at the same time, as a sort of quid pro quo, if the issue were taken to the court. Meanwhile, I must make it clear that negotiations with the Parliament continued and taking the issue to the court was a long-stop procedure.
In the Council there were a large number of different views. Italy, Ireland and Greece wanted to make the payments. They did not want to dispute the Budget, or to take the Parliament to court. On the other hand, the United Kingdom and certain like-minded countries wanted to do what the House has suggested. It was possible to find consensus—a word that I should have thought would have been appealing at any rate to one hon. Member in the Chamber with liberal attitudes to these matters—only in the course which the Council finally adopted.

Mr. English: I am grateful but puzzled. The Financial Secretary seems to have said that what was basically a budgetary issue, to be settled in a Council of Finance Ministers of one rank or another, was decided in a different way because by sheer accident the next meeting was a meeting of Foreign Ministers of one rank or another. How does an issue of budgetary importance become an issue of foreign policy?

Mr. Ridley: I had hoped that my trailer would cover the full story and would save the hon. Gentleman the trouble of intervening. However, the answer is that in community affairs it is quite usual for urgent business to be taken by the next council on the agenda. As the next council was a foreign affairs council, the matter happened to be handled by it, rather than by the budget council. There is nothing unusual about that.
Negotiations are continuing with the European Parliament on both the wider and narrower levels. However, if there is no agreement, we shall seek the court's ruling. The report of the Treasury and Civil Service Committee stresses three concerns about the Government's decision. First, it was asked why we should pay in full and, if we had to do so, why we could not pay it into court or reserve the money to a stakeholder. However, the money has been paid into the EC No. 1 account, held by the Paymaster General and under the control of the Treasury accountant.
Therefore, the money is with stakeholders—ourselves. As the money is still within the Treasury, no interest is payable and interest will not become payable until such time as the issue is determined by the court or by negotiation. If at any time after the money became due—technically on 1 February—we had not taken such action, interest would have become payable to the Commission. Therefore, the interest was working in support of what the Government did. By taking such action we shall not incur interest and if we had done the opposite we would have incurred interest if the court found against the Council. We paid in full because we thought it important to achieve a consensus and that it was right to go with the majority to achieve a balance between court action and paying in full.

Mr. Richard Wainwright: Does the hon. Gentleman agree that the money is wholly available for spending by the Community and, as a Treasury witness told the Select Committee
it is being spent en principe
and is not being held in any neutral state?

Mr. Ridley: The answer is "en principe". The money is available only en principe and is not being used. Many of the disputed programmes are tacitly not to be implemented by the Commission until the dispute has been resolved. Therefore, the money is in suspense pending the settlement of the dispute.
I turn to the major worry of why we paid and whether we should have paid the extra. The quotations that has been read out are fair and reasonable descriptions of the situation. The Treasury officials who gave evidence have described the court's position accurately. Of course, the court is not British. In this case, it is acting as a constitutional interpreter of the Treaty of Rome and is adjudicating not on a body of law or on statute but on a treaty that is far from being a finite statute. Perhaps it is necessary to take the House back to the issue as to why the budget was disputed and why the Parliament and the Council are in disagreement. The dispute is about what items within the budget are obligatory or non-obligatory. On obligatory items, as the House will know, the Council has the last word about the amount of money. On non-obligatory items, it is the Parliament which has the last word. What the Parliament sought to do last November was to make non-obligatory certain items of expenditure which the Council thought should be obligatory.
The definition of obligatory stems from the Treaty. It is simply that items of expenditure which follow automatically from the Treaty of Rome are obligatory. That is not finite or precise. It is not a matter which can be the subject of a legal judgment of the sort that we are accustomed to. It is a question of interpreting the Treaty. If the word was used, I do not deny it; it must have a certain political element about what is the right way to develop the institutions of the Community.
The concept of lawfulness which the hon. Member for Greenwich (Mr. Barnett) put forward is hard to interpret in the light of the issue which is before the European Court.
The Treasury and Civil Service Committee and the hon. Member for Colne Valley (Mr. Wainwright) raised the question whether we were right to treat the extra payment as we did for this Parliament. I am glad that the Committee thought that we were right not to pay the extra money out of the Consolidated Fund. We considered on legal advice what was the right way to treat the House of Commons in relation to our decision. Our legal advice was unanimously to the effect that we should make a statement to the House which was the opportunity for the House to be informed of what had happened, to lay a Supplementary Estimate, and to make it clear that a debate could be held on that Supplementary Estimate and that it would be welcomed by the Government.
The report of the committee says that an immediate supplementary estimate on which the House could have taken a decision should have been laid. It has been said in the debate that we employed a back-door method by making the payment out of the Contingencies Fund. This is perhaps the case I have to answer to the hon. Member for Nottingham, West (Mr. English).
Payments were due to the Community on 1 February. The Government came to their decision only a very few hours before that. Interest would have run from 1 February if we had refused to pay. If the Government had presented a Supplementary Estimate on 3 February, the day my right hon. Friend made his statement, then under the House of Commons Standing Order No. 18 it would have been 10 February before a Supply resolution could have been taken and at least a further day or two before a special Consolidated Fund Bill, which would have been required, could have been passed through the House. In any case, it would have been unhelpful for the conduct of the business of the House for the Government to have presented a special Supplementary Estimate early in February when the spring Supplementaries were to be presented on 18 February. In either way of handling it, it would have been too late to have validated the payment through the House, so to speak, before the payment had to be made.
The Contingencies Fund is for cases which arise frequently where an urgent payment of money has to be made by the Government and there is not time to validate it by a special procedure, nor are the Estimates before the House at that moment. As the House will know, this is something which has been done for many years and which has been common. Whether it be a hurricane or a flood or whether it be an urgent need to honour our word given in Brussels on a matter like this, it does not destroy the point that it was urgent and had to be done.
I must point out to the hon. Member for Nottingham, West that there is no doubt about the rightness of this procedure. I refer him to the Third Report of the Public Accounts Committee for 1978–79 where the Committee said:
The Treasury told us that they had no residual doubts about the propriety of the Contingencies Fund transactions.
So where these lawyers who are split down the middle can be, I do not know. We certainly have no doubt. Indeed, the Committee itself endorsed the procedure. I quote again from paragraph 31:
In our view it provides the flexibility necessary in order to finance urgent Government expenditure in advance of parliamentary authority. Parliament has always been aware of the Fund and its uses. Its existence has been recognised in many statutes. We are satisfied that the legal advice obtained by the Treasury has resolved any doubts about the status and use of the Fund. We also welcome the assurances given by the Treasury and the Comptroller and Auditor General that use of the Fund is closely controlled and monitored, in accordance with the operating rules which have been reported to Parliament.

Mr. Michael English: I am grateful to the hon. Gentleman. I cannot obviously reveal the evidence that was originally requested by the old Expenditure Committee and received by the present Treasury Committee. But, as a footnote in this report states, we are going to append and publish it in one of our next two reports. I can only assure the hon. Gentleman that some of the most eminent constitutional lawyers in the land have taken the view that he has just adumbrated and about half of them have taken exactly the opposite view.
The reason for this is perfectly simple. Whilst there is statutory authority for payments into the Contingent Fund there is no statutory authority for payments out of it. It therefore becomes a question whether the Government have authority for payments out of it not based on statute but at common law. That is something that goes back long before the modern principles about the payment of money.


Tonight we are indeed engaged in passing a Bill that authorises the expenditure of money. That is what we are actually doing. The question is whether the Crown can spend money without being authorised by Parliament to do it. That is where the doubt as to the legality lies. I do not want to go into it now, but I assure the hon. Gentleman that when the evidence is published he will realise that the matter is not quite as certain as he may have been advised.

Mr. Ridley: It is not uncommon for the hon. Gentleman and me to find ourselves at opposite ends of an argument. I never realised before that either of us was of the calibre of legal expertise to be in the category in which the hon. Gentleman put us. We await with interest the next report from the Committee to which he referred, but at present I must be firm in stating that the position is as reported by the PAC. The Government themselves have a strong view about the matter—that that is what the legal position is and that is how they will operate.
The classification talks between the Parliament, the Council and the Commission about what sort of expenditure should be classified as obligatory and what as non-obligatory are taking place. The whole question of the Parliament's margins—what items it can increase and what it cannot—and other issues are being discussed in that series of talks.
It is our earnest hope that we can avoid these budget debates in the future and can work out a sensible formula for carrying out these tasks. I hope that the talks will also result in an agreement between the Council and the Parliament about the 1982 budget, which is the subject of our difficulty. If not, we shall certainly pursue our case in the courts and we shall report to the House whether the money comes back, because we have won our case, or whether it is validated by the court as an expenditure, in which case it will be validated under the European Communities Act as properly expended out of the Consolidated Fund.
I hope that the House will feel that we have not treated it in a cavalier manner in this unusual and difficult situation. I hope that what I have said tonight will show that we have tried to keep the House informed and to give it every opportunity to control the Government in the matter of this expenditure.

Orders of the Day — Amersham International

Mr. Ioan Evans: I am pleased to raise the subject of Amersham International. We have just been dealing with the problems of financing the European Community. Now we turn our attention to what I beleive to be a financial scandal—the way in which the Government handled the sale of Amersham International.
The company has been an outstandingly successful nationalised business, the world leader in its high-technology field. Its sales have grown by 50 per cent. in the past three years. It produces radioactive chemicals, mainly for medicine. Biotechnology has become a fashionable industry for investors to back, but most of the companies in it have still to show a profit. That is not so with Amersham International. In the year to last March its pre-tax profits reached £4·1 million on sales of £48·5 million, and more than 80 per cent. of that was earned abroad. Its only big rival, New England Nuclear of America, was bought by the chemicals giant du Pont.
Amersham International employs about 2, 000 people, not only in this country and Europe but in America and Australia. Its headquarters are in Amersham, but there is a large development taking place in Cardiff, one which is of particular interest to all hon. Members from South Wales.
The company now produces and sells 2, 500 types of radioactive chemicals for laboratories and hospitals, and other radioisotopes used to measure the thickness of industrial steel and—perhaps a less mundane use—to trigger off nuclear reactors. It is a very important company.
Evidence of the company's strength is that it had no difficulty in persuading the State shareholder—then the United Kingdom Atomic Energy Authority, although the ownership was transferred to the Department of Energy for it to do what it has done with the company—to help finance an ambitious £20 million expansion programme in Cardiff alone. The new Cardiff facilities, which effectively double Amersham's production capacity, were opened only last May. I emphasise that £20 million of public funds was put into the Cardiff development, doubling the company's productive potential. There is no doubt that that was a strong commercial undertaking fulfilling all the criteria that the Government have talked about, being competitive, productive, efficient, profitable and with good industrial relations. There was no reason why that company should have been handed back to the private financial speculators other than the doctrinaire dogma that has been pursued by the Government. Eleven of the 18 hon. Members who have requested debates under the Bill have chosen this subject. That shows the deep concern felt about the way that the Government have dealt with the issue.
On 22 December—a Christmas present for somebody, I suppose—the Under-Secretary of State for Energy, in a written answer, stated that the Department of Energy had decided to offer shares in Amersham International for sale to the general public. On 11 February the Under-Secretary announced, again in a written answer, that arrangements had been made to offer on the Stock Exchange all the shares of Amersham International at a price of 142p a share. That implied a market capitalisation of £71 million.
On 24 February, in another written answer, the Under-Secretary stated that the offer for sale of Amersham International had been 24·6 times over-subscribed.
That is the background to the scandal of the sale of the company. I believe that the Government's privatisation policies are against the national interest. Even if one were to decide to sell off public assets, it was against the national interest to sell that highly financed industry during the middle of a recession because, although the Prime Minister talks about seeing the light at the end of the tunnel, it seems to be a very long tunnel. It was wrong for the Government to sell that national asset when the market was depressed. It is major scandal that national assets are being sold at knock-down prices. That is the accusation that we make against the Government. It must be looked at against the background of other measures already taken by the Government to dispose of public assets.
The sale of shares in public sector companies since May 1979 is as follows: between 1979 and 1980—as soon as they took office—the Government sold part of British Petroleum, a national asset of the value of £276 million, Drake and Skull Holdings, £1 million, and Suez Finance, £22 million; during 1980 and 1981, British Aerospace, £43 million; between 1981 and 1982, British Sugar Corporation, £44 million, Cable and Wireless, £184 million and the National Freight Company, £53 million.

Mr. Anthony Beaumont-Dark: Splendid.

Mr. Evans: The hon. Member says "Splendid". There was a deficiency of £47 million on the pension fund, so having sold off the National Freight Company the Exchequer benefited by only £6 million.

Mr. Beaumont-Dark: And the workers who bought the shares.

Mr. Evans: I will come to those in a moment. The Government talk about wider share ownership, but we should realise that if firms are held in public ownership every man and woman has a share in the company. If, however, the firm is put on the market, only those who are able to finance the purchase of shares become the owners. To talk of wider share ownership is a deception; it is dishonest. The Government should not perpetrate the lie on the British public that they are giving wider share ownership by putting up these companies for private grabs.

Mr. Geoffrey Robinson: It might interest my hon. Friend to know that, according to one newspaper report, at least 50 per cent. of the purchase costs of Amersham was loaned to potential investors by the Bank of England. It had nothing to do with small investors.

Mr. Evans: I hope that my hon. Friend will develop that point.
The sale of Amersham International has provided financial speculators with handsome profits on the Stock Exchange. The miscalculation, it is estimated, could have cost the Government £21 million. Interruption. My right hon. Friend the Member for Leeds, South (Mr. Rees) says that the amount could be higher. This is money that has been lost due to the manner in which the Government have dealt with the matter. It is a massive scandal.
Over £1, 750 million flooded in to bid for the £71 million worth of shares offered in Amersham that has been

publicly owned since the war. It was taken over under a Tory Government. Churchill may have been the Prime Minister when it was brought into public ownership. Under successive Conservative and Labour Governments, the company has been kept in the ownership of the British people. Only this extreme Right-wing Tory Government have adopted different policies. The debate is needed to expose what the Government are doing.

Mr. Hugh Dykes: Is not the hon. Gentleman being wise after the event? Did he raise some of these points before the plans were promulgated? Did he object to the issue price? Did he read the newspaper comments suggesting that the price was high enough?

Mr. Evans: If the hon. Gentleman reads the Committee proceedings of what became the Competition Act 1980 he will find chapter and verse of the Government's approach on the sale of these companies. The view was that the problems of Britain would be solved by increased competition. The Government outlined how assets would be sold off. I defended public ownership.
The need to sell a highly successful company at this stage of an economic recession at a give-away price has to be justified by the Government. They are in the dock. It is not the Government of the right hon. Member for Sidcup (Mr. Heath) who are in the dock. The right hon. Gentleman did not try to do away with the firm. Nor did Harold Macmillan, Eden or Churchill when they were Prime Minister. They did not seek to share the spoils of public ownership in the way that this Government have done. That is our indictment of the Government.
The company has been publicly owned since the war under the wing of the United Kingdom Atomic Energy Authority and Governments of various political persuasions. When dealings in the shares the following day jumped on the Stock Exchange to 190p, that represented a one-third premium over the initial offer price of 142p. The company could have been sold for £85 million, but was disposed of for £63 million. That is why we come to the calculation that £21 million has been handed to those people who, of course, held the shares for a few days, disposed of them and consequently made a financial packet.
They were not the only people to draw a financial benefit. The Government handling of the sale of Amersham shares must be exposed. The two merchant banks involved were N. M. Rothschild and Morgan Grenfell. As I understand it, the Social Democratic Party candidate for Glasgow, Hillhead is involved with Morgan Grenfell, although I do not know whether he was consulted. It is strange that the Government should be consulting the Social Democratic Party candidate about the state of these shares. However, Morgan Grenfell is not so much the evil villain of the piece. Rothschild was the Government's adviser. The two banks received £310, 000 between them for disposing of this considerable national asset; putting this successful company on the market: and carrying out the Government's financial dogma.

Mr. Robert C. Brown: Does my hon. Friend not find it remarkable that these bankers, with money running out of their ears, get £310, 000, which is almost the total cost—£386, 000—of shares allowed to the employees?

Mr. Evans: I am glad that my hon. Friend has mentioned that point and I hope he will develop the idea


of dangling a little bit to the workers in the company to try and prevent them from taking industrial action that would be of disadvantage to everybody.
I will not stop with the involvement of Morgan Grenfell or Rothschild because the stockbreakers Cazenove—I almost said Casanova, and said "stockbreakers" as a Freudian slip—earned a commission of £89, 000. The expenditure did not stop there. A large group of leading investment institutions in the City offered to underwrite the new shares and were paid a commssion of £887, 000. When my right hon. Friend the Leader of the Opposition said, "Somebody has made a million here", the Prime Minister said she hoped that he would repeat it outside the House. I will repeat these figures outside because over £1 million has gone to the stockbrokers and financial agents to dispose of this company.
It can be argued that when a private concern sells off its shares to go on the market, it is normal City practice to underwrite the sale. Surely the Government do not have to do that. The Government, who are hell-bent on selling off the company, do not have to pay £887, 000 to underwrite its sale when the company has been oversubscribed by £25 million. That situation is a scandal and it was obviously unnecessary to underwrite this share as an insurance against the issue going badly.
The Opposition are concerned and raise the sale of these shares because the Government have other proposals in the pipeline. They will not stop with the financial speculators getting their greedy hands on this publicly owned company. Such examples are the sale of British gas interests in Wytch Farm oilfield in Dorset—estimated to sell at £200 million to £300 million—the sale of 51 per cent. of Britoil and BNOC oil industries for £750 million to £900 million and, in addition, the sale of British Gas offshore oil interests at £700 million. They are all scandalous examples and are a form of national corruption. Churchill defined the Tory Party as a group of organised corruption. There will be a sale of shares in British Telecom for about £1, 200 million. In that industry there will be tremendous technological development and it would be to the great benefit of the British people that it should be kept in public hands.
Much has been said about the crime rate, which has increased massively since the Government came to power. I believe that the biggest bunch of criminals are those who sit around the table in the Cabinet room and are beginning to dispose of our national assets. The appropriate subcommittee of the Cabinet is presided over by the Prime Minister.
Publicly owned industries have played a significant role in the British economy. They account for more than one tenth of the gross domestic product and possibly one fifth of the total fixed investment in Britain. The four largest employers, leaving aside the Government, are the publicly owned industries. They occupy a dominant position in energy, steel, transport and communications. About one third of all plant and equipment produced by British industry is consumed by publicly owned enterprises. They are also the sole domestic customers for several areas of British industry.
The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) knows what a disaster it would have been for Birmingham if British Leyland had collapsed.

Mr. Beaumont-Dark: Absolutely.

Mr. Evans: It is absolutely true that if that firm had collapsed, thousands of small private firms would also have collapsed.
The Government took Rolls-Royce, British Leyland and Amersham International into public ownership as loss-makers, but when they became profitable they were put on the market to be sold to private speculators. That is immoral. If the taxpayer must pay for a loss-making industry, why cannot the taxpayer, the ratepayer and the general public have the benefit of publicly owned industries when they become successful?
If we consider the Government's record, we see that a large section of the private sector has been destroyed. In my constituency firm after firm has gone to the wall because of the Government's financial policies. They have abolished exchange control and companies are investing abroad instead of in Britain. There is plenty of scope to invest in the private sector, but the Government are not doing that. They have destroyed a large section of private industry and are now hell-bent on destroying the public sector.
There is a myth that publicly owned industries do not make as much money as the private sector. That is nonsense. Amersham International is a classic example of the many public firms that are highly profitable and which, by being profitable, are beneficial to British people. We must spell out that fact to the general public. From 1940 onwards, that firm earned money for the Government. It was in credit and it meant that the more that we could earn from the public sector, the less we needed to pay in taxes.
From listening to the Tory media, one would almost believe that only Britain has publicly owned industries. Yet the French Government recognise that if they are to achieve economic recovery they must have a programme of publicly owned industries. Mitterrand has put to the people of France the need to develop public ownership. We have seen that in Germany, and intervention in Japan. All our main industrial competitors are using greater and greater economic intervention and yet we have this Government.
Yesterday the right hon. Member for Sidcup said that with the Budget monetarism was dead. It is not—it is alive and breathing. The sale of Amersham International is part of the monetarist policy. If one reads Hayek and Milton Friedman one finds that they talk about the need to dispose of industries owned by the general public.
There is also the argument about monopolies. The danger is, what guarantees are there? Amersham International is a main supplier to the National Health Service. It provides radio isotopes for cancer research, and other things. What guarantees have the Government that the firm—it was owned by the British people and when it made excess profits that excess went back to the people—will not charge increased prices so that the National Health Service will be putting more money into a private firm run purely for speculative profit? The National Health Service may be paying a great deal more in the future than it has so far.
This is a scandal that reminds one of the sale of St. George's Hospital, which is between Hyde Park and Buckingham Palace, and is almost as big as Buckingham Palace. The building, with an estimated value of £20 million, is being sold back to the Duke of Westminster by the Government for £20, 000. If people outside this place


realise what the Government are doing, I warn the Government that there will be trouble. There has been trouble before with their policies and if they will not change their ways and begin to govern in the national interest instead of in the interests of the financial backers who put them here, there will be trouble.
We are fully justified in raising the sale of Amersham International. We cannot now undo the damage done by the financial speculators let loose by the Government. What we must do—we can do it in this debate—is warn them that outside the House there will be a growing feeling that the Government cannot justify their continuation in office if they deal with other companies as they have dealt with this excellent company that has served the British public so well.

Mr. Merlyn Rees: My hon. Friend the Member for Aberdare (Mr. Evans) tempts me when he speaks about central European monetarists' policy. I am as sceptical of them as I have been for 40 years about central European Socialists. Somehow, they breed people who do not understand this country. He also tempts me when he talks about the different types of public ownership, because Amersham International was never a nationalised industry but a 100 per cent. owned company. In that way it is rather like British Leyland. Out of its development over recent years, there have come companies in which the people have owned 25 per cent. shares and so on.
My point tonight is that the procedures of the House do not match up either to the sale of companies in which we have a proportion of shares or to discussions about the way in which we go about the nationalised industries, some of them before the war but most of them since the war.
I agree with my hon. Friend that Amersham International should not have been sold, but it was Government policy and in my view what we are looking at tonight is the method of sale. We are using the Supplementary Estimates and the figures in here to find out what happened and what the true figures are. We are using the debate on the Supplementary Estimates for its proper purpose. We seek from the Minister this information.
I remind the House that on Monday 22 February—that is, before the final sale of Amersham International—I sought leave of the House under standing Order No. 9
for the purpose of discussing a specific and important matter that should have urgent consideration".
The words that I used on behalf of my right hon. and hon. Friends were:
the need for the Government to impose a moratorium on dealings in Amersham International shares until a full investigation has been made into the sale of Amersham International at a price that will lead it to a substantial loss to the British taxpayer."—[Official Report,  22 February 1982; Vol. 18, c. 601.]
So it was clear before the sale on the Thursday that there was to be a loss, and that the full amount of money that could have been obtained was not obtained. We did not have to wait until after the event; we knew before the event that the Government would lose money on their sale.

Mr. Dykes: I accept what the right hon. Gentleman says for the immediate few days before the issue, but the press began to pay attention to the matter before then, and

the bulk of comments were to the effect that the issue price of 142p was enough, or too high, or perhaps pitched on the high side.

Mr. Rees: I shall seek to argue in a moment what was said in Committee about Amersham International a long time before the newspapers and financial pundits made their comments. If Governments were to proceed on the advice given by the financial correspondents of newspapers, we should be bankrupt. Most of them are free with their advice, but they do not follow it themselves.
On the previous Thursday, applications worth £1·5 billion were made for a £71 million offer. The shares were 142p. They were sold at 182p. I wonder what the price is now. Perhaps it is 192p. The stags made a killing of £25·5 million. It does not matter what the stags made, who they sold to, or how they bought the shares in the first instance. What matters is how much money the Goverment get. Is it the figure that I have of £63·7 million? The Government have made their decision. They undersold the company in such a manner that the community lost £25 million. What an outcry there would be if, in local government, the nationalised industries or anywhere else £25 million went astray and if it was accounted for in the conventional fashion. The Government are concerned about public expenditure, but this loss is not accounted for in the Beige Book, the Red Book, the Blue Book, or any other coloured book that we get around Budget time. It is our job tonight to find out the facts.
The method of sale was decided by the Secretary of State for Energy. I remind the hon. Member for Harrow, East (Mr. Dykes) of what my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) said on 7 April 1981 —nearly a year ago:
The danger of public flotation, as has been mentioned by many members of the Committee—and, I hope, taken on board by Conservative Members—is that if it is done in an uncontrolled way, it will allow nominee buying of all kinds, and, in time, the company could effectively be in the hands of an organisation, which was not the Government's intention and certainly not the wish of the staff. Therefore, we cannot support the principle of an uncontrolled public flotation of the shares in The Radiochemical Centre Limited."—[Official Report, Standing Committee A,  7 April 1981; c. 81.]
That was what my hon. Friend said nearly a year ago—long before the newspapers got hold of the story.
In our view, different methods must be used in any future sale of shares. I imagine that we are entitled to use whatever information that we get tonight—the amount of information here is not good enough—to remind us that we must not make the same mistake again. That is the purpose of the Estimates and the reports of the PAC.
Reference has been made to the number of shares purchased by employees. In Committee my hon. Friend the Member for Merthyr Tydfil tabled an amendment which would have given a substantial number of Amersham International shares to the employees. With all the talk about a property-owning democracy and articles of association saying that there shall be an employee share scheme, what is the percentage of shares that can be purchased by employees?
It is 3·7 per cent., or thereabouts. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) was surprised when the figure was given. Skilled scientists working in both plants, and having built up the company in the main plant at Amersham over the years, they can purchase only 3·7 per cent. of the shares.

Mr. Lawrence Cunliffe: The figure is 3·6 per cent.

Mr. Rees: No doubt the Minister will confirm the figure.
I am sure that a method of tendering was considered by the Government. Sale by tender would do what my hon. Friend the Member for Merthyr Tydfil referred to in Committee and lead to purchase of the shares by the big institutions—at least, that is what was argued. Therefore, we want to know who did purchase the shares in Amersham International. We have a right to know, and I believe that there is a way of finding out.
We are sometimes guilty of using slogans to describe a belief about which we feel strongly. With privatisation it was said that the community will own the company. Well, we have 3·6 per cent. for the employees.
I checked last week—my information cannot be authoritative as I am not in a position to be so—and was told that in a population of 55 million, knocked down to 18 million to cover people of voting age, there are about 60, 000 people in this country who own shares other than through pension funds or insurance policies. That is one crowd at Manchester United—or a lot of crowds at Leeds United these days. That is not a large number. Therefore, who bought these shares? Apart from the 3·6 per cent. and the odd small purchaser, the shares will be owned by the trusts, the merchant banks and the pension funds.

Mr. Geoffrey Robinson: The merchant banks will not have any.

Mr. Rees: My hon. Friend says not the merchant banks. It depends on how far the price will go. However, I want to know who now owns the shares.
There is another thought. If the Government want to sell shares to the general public, why not do so over the counter in post offices? There are thousands of post offices. The sub-postmasters lobbied Parliament because the Government were cutting the amount of work they do. If the people of the country are waiting to buy the shares of the companies that are being sold off, why not sell through the post offices, because most people do not know where Throgmorton Street is? They do not know about the City, but they do know the post office down the road. Therefore, if the Government are to carry on with this policy, how will they sell shares in the future?
I come now to the accounts. We have in 1981–82 Class IV, Vote 25. My hon. Friends have today been devilling around looking for information, but all we start off with is this:
A1. Expenses in connection with the sale of shares of Amersham International Limited—£4, 000, 000. This includes financial and legal advice, underwriting (including stamp duty) and other costs.
I shall come back to that because the Department of Energy has given broken down information on that:
Further expenses may occur in subsequent years, including any arising from indemnities given in relation to the sale.
Who was given an indemnity in the sale? Appropriations in aid are £3, 999, 000. The net total is £1, 000. No doubt that is a device that is used in the accounts.
I presume that the real figures emerged only after the notional figures were put in the supplementary estimates. The global estimate is £2·6 million to £2·7 million. Banks, brokers and underwriters are to receive £1, 154, 000. Therefore, the banks are receiving just over £1, 250, 000.

I presume that the banks are Rothschild and Morgan Grenfell and Co. As our job is to look at the accounts of Government, we must ask who the brokers are and how much they received. We must ask who the underwriters were. In the Department of Energy figures it is stated that £310, 000 is included for the merchant banks. Stamp duty was paid at £750, 000. That comes back into the Exchequer. The receiving bank is the National Westminster. It played no part with the merchant banks in the sale, but it was the receiving bank. It got £500, 000.
Publicity, solicitors and accountants received £200, 000. If that company were a nationalised industry that was taking over other companies, every scrap of information would have had to be given. I believe that every scrap of information should be given. Who were the solicitors? They performed their task properly, as did the accountants, but who were they? We should know.
It is stated that the cost of publicity is included in the figure of £200, 000. However, what about Rothschild and Morgan Grenfell? Surely publicity was included in their money. Therefore, there were two dollops of money for publicity. I ask the Under-Secretary of State: Is the publicity included in the figure of £200, 000 the only publicity and, if so, who did that part of the £200, 000 go to? Those figures need explanation. I ask for them in the interests of parliamentary accountability.
One other point has been raised in the last fortnight. I believe that I am entitled to raise it as I considered it when I was Home Secretary. It is not a narrow political point. Many firms, which receive fees that are laid down, contribute funds to the Conservative Party, as do trade unions to the Labour Party. This point applies to the trade unions as much as to those firms. Since about 1884 all hon. Members have had to publish election accounts. They must be related to a certain amount per elector. That amount is greater in a county constituency. Every scrap of money must be accounted for, down to the last halfpenny. Larger sums of money are given to the central parties, no doubt also to the regional parties. I do not believe that that is so in the Labour Party, except in a smaller way. That money should be accounted for in the same way. It is no good looking at the constituencies when we are not looking at the overall organisation.
The Government are committed to privatisation. They should ask the Bank of England to be responsible for the sale. I am advised that it would not need a large department, and that it would need to take on a few but it would not be difficult—

Mr. Beaumont-Dark: Would it not?

Mr. Rees: The hon. Member for Birmingham, Selly Oak, who is a stockbroker, thinks that that is not the case. I am advised that the Bank of England would not require many staff. It is the "National Bank" and in future sales it would be much wiser for the Bank of England to undertake the sales. I do not know what part the Bank of England played in giving advice on the recent sell-offs.
Underwriting fees need to be paid only if there is a doubt about the appeal of an issue. That is what underwriting is all about. It is incompetent to underprice an issue substantially and then to pay an underwriting fee. I should like to hear the Under-Secretary's comment on that.
We have been referring to Amersham International, but one or two other companies have been under-sold. British


Aerospace and Cable and Wireless are examples, and BNOC is also relevant. The information is available and we must learn from it. The same mistake should not be made again.
An allegation has been made in The Observer about BNOC. I wonder whether the same thing has happened with Amersham International. According to the allegation, Rothschild received £155, 000 even before the House had given its approval for the sale of BNOC, and before Second Reading had been obtained. The device used was to charge the money to BNOC, which is 100 per cent. State-owned. Therefore, we have a new way of going about privatisation. Permission is not obtained first from the House of Commons. The Secretary of State goes to the 100 per cent. State-owned company for which he can give directives and he says to it "Get privatisation under way. I have not got the permission of the House of Commons, but who cares? The advice costs £155, 000 and I may not get it. We may change our minds as we did in the year before when we published a Bill and then did not proceed with it".
Why was that information not given to the House of Commons? What is even worse is that the directors of BNOC were not informed either. The allegation in The Observer states that the board, apart from Mr. Shelbourn and Mr. Danzig, was not told what was happening. Was the same thing done with Amersham International? We shall have our chance to discuss BNOC, but I should like to know whether this happened with Amersham International. No paliamentary authority was obtained.
The Chairman of the Public Accounts Select Committee—a former Conservative Minister—said that if he were Chancellor of the Exchequer there would be an inquiry about Amersham International. At the time of the sale, The Daily Telegraph headline was "Amersham inquiry ordered." The Times story was smaller. It read:
Senior sources suggested that the Prime Minister was indeed embarrassed by reports that £20 million profits had been made at the taxpayers' expense and that in such circumstances, an internal inquiry would naturally follow. It was stated, therefore, than an inquiry could be expected in both the Treasury and the Department of Energy".
I do not believe that for a moment, because it applies to the couple of days during which the stories were running. This is on all fours with the material in the past few days about the Prime Minister leading the fight against crime. Apparently it will be nothing to do with the Home Office. The right hon. Lady is to lead the fight against crime and she is to have an inquiry. I do not believe that. I know that the Under-Secretary will tell us that the reports that appeared in the newspapers, which came from briefings, were untrue and that the press produced the usual old hokum when it was concerned about the issue. One can visualise the briefings that took place, during which it was probably said "Tell them that we shall have an inquiry". Of course we shall not be having an inquiry.
However, I am told that the Public Accounts Committee is to have an inquiry. I wrote to the Committee and it told me in reply that it would not hold an inquiry into Amersham International but that the chairman is taking up one of the previous sales when much the same thing happened. Therefore, we shall have an inquiry in the House.
If the Amersham International scandal is repeated with BNOC, there will be losses that would amount to an even greater national scandal. We must learn from the Amersham International scandal. The Government have

not thought out the method of privatisation. In investigating the scandal we are performing our watchdog role in an endeavour to ensure that a similar scandal does not take place again. It is not often that the Supply Estimates enable us to perform our proper job, but we are seeking to carry it out tonight and we want information. We do not want the emotional stuff of two or three weeks ago. We want the facts to fill in the bare bones.

Mr. Anthony Beaumont-Dark: I think that everyone knows that I am a member of the Stock Exchange. I have in the past dealt with the house of Rothschild, Morgan Grenfell and Co. and other reputable merchant banks. I had no underwriting on this issue. I did not apply for shares for myself in this issue although my children's trust obtained 200 shares. I did not apply for myself because I believe that in public life as an individual it is often safer not to apply on such occasions, and such proved to be so in this instance.
More nonsense has been spoken on Amersham International and more heat has been generated for so little light than anything that I have heard or seen this Session. The Leader of the Opposition took up almost an entire Prime Minister's Question Time on this issue and the terms that have been used tonight include "financial scandal", "dishonest", "private grabs", "evil villains", and "speculative profits". If these terms are meant to imply that the house of Rothschild is to be linked with them, I must say that such words often speak more of those who say them than they do of those whom the utterers attempt to slander.
I take the House back to another "wicked scandal" that took place in 1977. It was a much easier sale and a much larger one to boot. The Government sold 67 million BP shares. Amersham International was unique in what has become a fashionable sector whereas BP had been around for a very long time. Furthermore, BP was a quoted company at the time. It was much easier to judge the price in the BP sale because there was a public price to judge it by.
What happened in the BP sale? The sale of 67 million shares attracted applications for 315 million shares—another scandal! I do not believe that it was called a scandal at the time. However, the premium between the first day and the second day was between 68p and 85p a share. Some wicked people, with the connivance of an evil and corrupt Government—a Labour Government — made £50 million, which in today's money is about £90 million.
If it was beyond the wit of the Bank of England, which I believe did the issue, to be accurate, with a public quotation there to judge it by, why should Amersham International with all the esoteric sides of its involvement be easy to judge?

Mr. Merlyn Rees: This was discussed in various Committees. The hon. Gentleman will recall that Burmah Oil had been in some kind of trouble, and by some chance the Burmah shares had come as part of the BP portfolio. I shall not go into the reasons for Burmah being in trouble, but selling off a company and selling off a proportion of Burmah shares in BP are quite different matters.

Mr. Beaumont-Dark: I am delighted that the right hon. Gentleman mentioned that, because he is quite right. A few days makes a tremendous difference when placing


stock. A difference of a few days can make a fool look a genius and a genius look a fool. Much the same seems to be true of politics.
The oil market was in a depressed state and it changed. It turned on a sixpence, as we say. What happened with this issue? My right hon. Friend decries financial journalists. People always decry journalists, although they rush to get into print if they possibly can. Let us consider the press comment at the time. As an individual, I believed that The Daily Telegraph was right to say that the shares were "high". The Investors Chronicle,  which had a chance to consider the matter for a few days—it is not known to be a highly excitable paper and is usually very accurate—said that they were "a shade ambitiously priced". The Financial Times said that the issue had a "pretty glossy dressing".
The company was issued not at 19 times last year's earnings of £4·1 million, but at 19 times the forecast of £8·3 million—in other words, at 30 times the last real year's earnings. All the rest is promise. The General Electric Company, one of the most successful in the country, with a great track record behind it, stands at about 13½ times earnings. Whatever one may think of particular companies, I think that everyone agrees that Marks and Spencer has a supreme track record in growth, management and labour relations. Marks and Spencer is on 17 times earnings and ICI on 9½ times earnings. So why should issuing a company without a proven record—indeed, with a very patchy record—at 19 times earnings be regarded as so wicked?
The right hon. Gentleman said that we should use the Bank of England to do issues in the future. That may sound a good idea, but the pricing of many gilt-edged issues by the Bank of England shows that it has sometimes been substantially wrong—not because it is venal, wicked or incompetent, but because interest rates and sentiment change on a sixpence. Barclays Bank recently issued a debenture stock for itself at a price which now makes it seem an unwise decision to latch on itself such a high debenture. These things happen. With the benefit of hindsight, of course, I would say that the shares were issued too low, but if I could reconsider every decision in my business life with the benefit of hindsight, instead of being the relatively poor man that I am, I should be as rich as many Opposition Members. If politicians could look back on many of the decisions that they have made and change them, there would be a lot more successful politicians and a much more prosperous country.
What we do with this money is not something scandalous. It is not just speculative profit. It is a Conservative philosophy that the State should not have a womb to the tomb envelopment for people. It is our task to see that successful companies should be returned to the private sector when they can be better run by it. It is only with the hundreds and millions of pounds that are raised by the sale of those enterprises that other companies can be kept going. The hon. Member for Aberdare (Mr. Evans) said that he wanted to see British Leyland kept going—and so do I. However, it will lose £500 million this year and that money must come from somewhere. It can either come from taxes, which causes higher rates of inflation or it can come from the sale of State assets on behalf of the people when continued ownership is not necessary. My answer to the hon. Gentleman is that the

year that we get BL onto a sensible, profitable basis, where it can stand on its own feet, BL will be better owned privately than by the British taxpayers.
I feel no shame in saying that the more we can build companies up to be prosperous, the more we can return them to private enterprise, the less taxation we need to impose upon people. The Amersham business is unfortunate for the poor people—I do not use the word "poor" in a financial sense—but the way that some people have been criticised because of the timing of this issue is wrong. The Governor of the Bank of England has not been sacked every time the Bank of England has been wrong about timing. If politicians were held to the same account there would not be many reputations or MPs left in the House today.

Mr. Ioan Evans: rose—

Mr. Beaumont-Dark: I am just finishing. Other hon. Members wish to speak and the hon. Gentleman had a good 28 minutes.
I hope that the House will not keep latching on to this great argument about scandal and disgrace. The sale could have been done higher, but not £25 million higher. That is a great nonsense. The shares might well have been 10p higher, but that is a different thing altogether. In my professional view, the loss to the taxpayer was more like £5 to £7 million. If one wants to float a company successfully, there has to be a premium and there have sometimes to be issues which are more successful and those which are less.

Mr. Peter Hardy: rose—

Mr. Beaumont-Dark: I am just finishing.
I hope that the House will get this matter out of its system. Those 11 good men and true do not seem to understand the difference between success and failure because most of their life has been shrouded in failure.

Mr. John McWilliam: I am grateful to the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). It has been made perfectly clear to the House that the Government intend to drag a smoke screen across this whole tawdry issue. I appreciate the hon. Gentleman's professional judgment, but I believe that he made one or two misquotes which I will come back to.
I asked a couple of questions about this which received some interesting answers. I asked the Chancellor if he would take steps to prevent unfair bidding for shares in a public company which is being privatised, whether by fixed price or tender, by virtue of the bidders' special inside knowledge of the likely value of the shares. The Financial Secretary told me that he was satisfied that the existing arrangements were adequate to prevent such abuses.
I also asked the Chancellor of the Exchequer
Whether he is satisfied that the present arrangements for the disposal of publicly owned assets are such as to maximise the return to the Consolidated Fund.
We all have the book and can see the figures. I received the following extremely illuminating answer:
As we made clear, we shall consider carefully the appropriate method of sale in relation to further asset sales. We certainly do not rule out the possibility of different arrangements in future from those we have hitherto employed."—[Official Report,  9 March 1982; Vol. 19, c. 378.]


That answer at least implies that even the Government were not entirely satisfied that the taxpayer had gained the maximum benefit from the disposal of privatised shares.
The hon. Member for Selly Oak said that it was a good idea to return assets that had been privatised to public ownership. That is not the case with Amersham International.

Mr. Beaumont-Dark: Who said that?

Mr. McWilliam: The hon. Gentleman said that.

Mr. Beaumont-Dark: I said that assets should be returned to private ownership, not public ownership.

Mr. McWilliam: I listened carefully to the hon. Gentleman. However, assets that have been generated and developed with public finance and the taxpayers' money should at least be sold at the maximum return to the taxpayer. I do not for a moment argue that such assets should be privatised. However, if the political dogma of Conservative Members demands that such assets are privatised, they should at least say that while they believe in privatisation they also believe that its price is the maximum return to the taxpayer. I am sure that the hon. Gentleman will agree with me and will agree that the evasive answer to my question to the Chancellor of the Exchequer at least shows that the Government accepted that the arrangements are not such as to maximise the return to the Consolidated Fund.
On 28 February the Investors Chronicle announced that every Amersham share would appreciate by about 30p from the moment that it was bought. If the journalist who wrote that story knew what would happen before the Amersham shares came on to the market there can be no doubt that the Government also knew. Indeed, 30p was an extremely conservative estimate. The figure turned out to be 48p. I can understand why it is said that the Investors Chronicle gave sound advice. However, we are talking not about venture capital but about sure things and about an additional 18p. It is interesting that the Government should choose to go to Rothschild, which has recently been reinforced by the appointment of Lord Soames as its consultant. The Government went to Rothschild and gained advice on the issue price. Therefore, why has Rothschild now been chosen as the bank to manage the sale of the British National Oil Corporation? It is another question the Government will have to answer at a later date, but one which we must ask now. I am currently serving on Standing Committee D on the Local Government Finance Bill. Financial mismanagement on this scale will be dealt with most severely by the penalties which the Government are suggesting, but in this case, where it is their friends who are concerned, there seems to be an entirely different set of principles involved.
Most underwriters involved in the sale of public assets, and therefore making substantial profits, have also made large contributions to the Conservative Party. Barings, for instance, who helped dispose of Cable and Wireless, made a contribution in 1980 of £15, 050. Kleinwort Benson, who disposed of British Aerospace, chipped in with £12, 500. Lazards, who did British Gas, contributed £11, 000. Morgan Grenfell, again involved in Cable and Wireless, contributed £12, 500. In total the accepting houses kicked in £92, 000 to Tory Party funds in 1980. We are expected to accept that there is no correlation between a nonsense such as has been perpetrated and those contributions.

Mr. Beaumont-Dark: I should like to ask the hon. Member a point blank question. Is the suggestion that these houses prostituted their professional knowledge in the sense that they got the issues because they gave subscriptions to the Conservative Party? If you are saying so, I think you ought to make it clear.

Mr. Deputy Speaker Mr. Bryant Godman Irvine): The hon. Gentleman must accept that I am saying nothing.

Mr. McWilliam: I am grateful to you, Mr. Deputy Speaker.
The fact that the accepting houses did so is neither here nor there. All I am saying is that these facts must be taken into consideration, together with the facts of the sale which we are discussing.
I quote from the Spectator:
There is absolutely no way of knowing beforehand what the `right price' of an issue is.
I agree with the Spectator. There is no way of knowing exactly the right price, but people have a good idea. To quote the Spectator again, slightly more against the case which I appear to be making:
What got it away to such a fantastic start—was its scarcity value. There are very few glamour companies in technology in the UK. And Amersham had all it takes, medical diagnostic and yet nuclear, all in the one ball.
This is true. This is one of the problems which Members on this side of the House face continually when they are trying to say to hon. Gentlemen opposite from the bottom of their hearts and from a completely different standpoint that this nonsense of confidence, this South Sea bubble type mentality, in speculation in shares is ridiculous. If it is going to happen with assets which have been developed as a result of public investment of money which came from the taxpayers, surely it is right that the benefit from such privatisation should go back in full to the taxpayers who made the initial investment.
Various suggestions have been made as to how we should proceed. For my sins, I was once a director of the Local Authorities' Mutual Investment Trust, which probably threw more money into more companies than most trusts in the United Kingdom did. I was well aware of my duty. It was not to the taxpayer but to those local government servants who had invested their pension funds in the trust. My duty was to secure the maximisation of the profits from the trust or the obtaining of sufficient capital growth and profits to enable us to pay the pensions, to pay the unittrust pension entitlement which we had built up. I entirely accepted that duty.
As a result of being a director of the trust, I was involved in taking decisions about underwriting share issues. I thought that for some of the share issues that we were asked to underwrite a fee of 1¼ per cent. was low, given their prospects, but we had a duty as a trust, and within the City such matters are accepted, and I went along with them. However, issuing shares in that way where the entire capital structure of the company is provided and underwritten by the taxpayers, through the Government, is nonsense.
I do not subscribe to the view that tendering for the shares, having a Dutch auction, will necessarily produce the best return for the taxpayers. But I see no reason why the Government should not themselves underwrite such shares, because they have put in the capital anyway, in the form of taxpayers' money. Nor do I see any reason why the Government—if they must do this—should not have their own jobbers, who can judge the market as it goes and


run the value of the shares, so that the maximum return comes to the Consolidated Fund and thus goes back to the taxpayers who made the initial investment.
The position is completely different from that of a public company floating shares on the basis of its capital assets. In the case with which we are concerned the company has capital assets built up from hard-earned taxpayers' money, and the company's capital structure is secure and underwritten. If the Government must do what they did, if they did it in the way that I suggested at least the prospective speculative gains, the balance of advantage, would accrue in general—not absolutely, because there will always be a small lag in the jobbers' working out the price of shares—to the taxpayer.
As a member of the Labour Party, I do not regard it as part of my remit to argue that the Government should dispose of assets built up from taxpayers' money. The taxpayers do not have the advantage of being able to vote, as the shareholders in a private company would. There is no way in which they can vote on whether they wish to dispose of the assets. Therefore, I believe that what the Government are doing is morally wrong, but if they are to continue they must consider a number of matters. The first thing they must consider is that those of us on the Opposition Benches, however charitable our approach to things, will look extremely hard at large contributors to Conservative Party funds making large profits out of such disposals.
The second thing the Government must consider is that their duty is not to their political friends in the City but to the taxpayers and the people from whom the money was extracted. I do not believe anyone voluntarily pays taxes. The Goverment's duty is to make certain that if those assets must be disposed of for some politically dogmatic reason then at least the balance of advantage must be in favour of the taxpayer and not the merchant banks or discount houses.

Mr. Geoffrey Robinson: I intend to be brief as I know that several of my hon. Friends wish to speak.
I am grateful to my hon. Friend the Member for Blaydon (Mr. McWilliam), with whom I serve on a Standing Committee and with whose remarks I willingly and entirely associate myself. We are not debating whether Amersham International was sold at the right price. If it were, I might have some misgivings about agreeing with some of the rasher claims which have been made by certain centres in the City and this House about its true value. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who has unfortunately left the Chamber, made a declaration of interest. I am not a member of the Stock Exchange, nor do I have a family trust. Since he has returned, I should say that if I were I would not have bought 200 shares at the price asked.
We on the Opposition Benches would find ourselves totally united in calling this a typical Government mismanagement of a difficult affair but one which they brought on themselves. I do not have a prospectus to hand, but if it is correct that the shares were valued at 19 times this year's prospective pre-tax earnings, which works out at about 38 times stock earnings, then they were grossly over-valued. Perhaps as it has been in the public sector and

allowed to build up massive reserves, the Government, who wished to sell the company for purely political reasons, then dressed up the balance sheet and profit and loss account and doubled the profit by adding reserves which had been built in over the years and produced a figure at which it was sold to the public.
I wish those who have invested in the company well. As my right hon. Friend the Member for Leeds, South (Mr. Rees) pointed out, I fear that the stags have made their killing and gone off. They were aided by the Bank of England, which enabled the operation to take place. Where are the shares now? It would be easy to track them down. Those who sold them and made a killing should be required to tell us where they are. They made enough money and in many cases they are underwriting in other fields which would cushion any costs involved. I should like to hear the Under-Secretary on this point.
From the written answer of 24 February it is not clear how much of the 3·6 per cent. reserved for employees under the preferred arrangements was taken up at the full price. Those figures must be immediately available. From that information, hon. Members would know how much of the 3·6 per cent. available at the selling price was taken up. It is normal, natural and desirable that those who have worked in the company and dedicated their time and expertise to it should participate in the sale and benefit from its success.
If one is talking about industrial democracy, co-ownership and co-partnership, 3·6 per cent. is very little to make available. My bet is that the holdings of employees amount to much less, depending on how much of the 3·6 per cent. was offered at the full price. I should be delighted to know whether that 3·6 per cent. is owned by the employees. It is, however, derisorily small. The idea that constituents of Labour Members were queueing up in the unseemly scramble at the Stock Exchange to buy shares to put in the piggy bank for their children is ludicrous. This was a carefully co-ordinated and thought-out strategy among those who deal in these matters, reaching a point at which the Government could have called the whole deal off. An article by Richard Lambert, the financial editor, in the Financial Times stated:
Some went to extreme lengths. Around 25, 000 counterfeit forms were printed, recognisable by a smudged dot and a pinhole in the top corner. On the day the applications went in, the Bank of England had to take special steps to smooth the disruption in the money market caused by the huge transfer of funds from the private sector to the Government.
This is what the matter was all about. It did not involve people in Coventry where factories are closing daily or those affected by a record rate of 9, 000 liquidations a year throughout the country. It was not the people of Coventry, where unemployment approaches 15 or 16 per cent.—I know that the figure is worse in other areas—who were scrambling in an unseemly, distasteful and probably badly informed way to acquire the shares. It was those in the City, in some ways at its worst, making a profit for themselves and at a cost to the Exchequer.
I should like to put a question directly to the Minister, although I do not expect him to answer tonight. If there is to be an inquiry into the circumstances, the price and the profit and the handling of the matter, serious implications arise for the Government. It would be interesting to know whether a Select Committee was able to elicit the simple fact that it was not the Treasury's view that the issue should be handled in this way. I have heard


it stated, and I believe it may even have appeared in print, that the Treasury wished it to be handled in a different way.
It is clear from the point of view of those who now have the shares and also from the point of view of the Government that it should have been handled differently. But, although the Treasury would probably have wished it to be done through the Bank of England by tender or perhaps by the American system, the Treasury was overruled by the Department of Energy. I do not expect an answer tonight. This is a question that will continue to exercise not only Labour Back Benchers but the Treasury.
There is no simple answer. I remember my days at the IRC which was closed by the Government headed by the right hon. Member for Sidcup (Mr. Heath). It is difficult when one has vast mergers to carry through, vast accounting exercises to undertake or flotations of this size, let alone Britoil, which is shortly to come, to decide how one should set about the task. There is any number of organisations such as merchant banks, issuing houses and all the rest, which are simply and properly touting for business. After all, that is their stock-in-trade. How does one, in fairness and logic, choose between them? It is impossible to do so. I do not make a charge of corruption against any of the merchant banks or institutions involved in this unseemly affair; they have behaved with competence and integrity. It is virtually impossible for the Government to choose between them for any definable, sustainable or justifiable reasons.

Mr. McWilliam: I apologise for hon. Gentlemen who have had to leave the Chamber. I hope, in saying what he did, that my hon. Friend the Member for Coventry, North-West (Mr. Robinson) did not seek to imply that I had suggested corruption. Nothing was further from my mind. I simply sought to suggest that those in public finance must be similar to Caesar's wife—not only pure but seen to be pure.

Mr. Robinson: I am grateful for that intervention, but, of course, it poses all sorts of problems.
When I consider the list of people in a company or institution, I ask whether there are any members or directors that I know. That might be called an inverse prejudice and it poses a real problem. The Treasury must produce an answer to that because, as my right hon. Friend the Member for Leeds, South rightly said, the sums involved are enormous. It is beautiful money;£2·7 million from the total of £70 million—getting on for 4 per cent. of the total cost—is going to institutions chosen, not on a whim, but inevitably at the discretion of the Minister. I would not wish to have that discretion. One can readily understand why there should be differing points of view, but the problem will not go away.
I am particularly glad that the question of Britoil has been raised. We are all glad that my hon. Friend the Member for Aberdare (Mr. Evans) was fortunate in the ballot. If a whole series of enormously valuable public assets are to be sold to the private sector—it is the Government's right, as they stated in their election manifesto to do that, and I make no bones about the fact that they are making an awful mess and are heading for a bigger mess on Britoil—we want clear guidelines on how that will be done, without the thought of unpleasant embarrassment that must now be felt by the institutions that carried out this exercise.
Just as the Treasury feels unhappy about it and has been overruled, and just as the Department of Energy has egg all over its face, there is no way round that fact. There were difficulties but, when we get to Britoil, is potentially immensely more complicated and potentially leads to more errors of judgment—

Mr. Robert C. Brown: My hon. Friend mentioned Britoil and, as a member of the Standing Committee, I know that we have only two more days in the House to consider the Bill from the end of the guillotine day timetable. We received the articles of association for Britoil only on Monday.

Mr. Robinson: I shall not be misled in that direction. We know that the Standing Committee has been abruptly guillotined, that the Government are pushing through legislation and that they are proposing to privatise BNOC. I say, through the Minister, to the Government that I can think of no worse time or circumstance in which to pursue that measure.
Which hon. Member, as owner of that part of BNOC which will be called Britoil, would be rushing around now trying to sell it? I do not believe that anyone in the House, acting in his own interests and in his right senses, would try to sell Britoil in a market where prices are falling, 
If we have in the case of Amersham International a consistent record of profit growth and a dramatic record of the doubling of profits in the year up to sale and we still have an error in judgment of such magnitude—in a few years' time it may prove to be an error in the other direction—how much more difficult will it be, if not impossible, to deal with the sale of Britoil when the market is falling? We are talking about sums that will dwarf into insignificance the rightful public anger about Amersham International, which will not go away any more than will the methods of disposing of those assets.
We know that the Government will not deal with Britoil in the same way as Amersham International. We have had a succession of replies to questions put to the Financial Secretary to the Treasury by my hon. Friend the Member for Blaydon. He is in difficulty because of the difficulties M the Treasury. First he said that he was quite happy with the sale of Amersham, but then he saw the mess and said that the Government must consider other methods, one of which is tendering.
The mishandling of Amersham International, the fact that profits have gone to speculators—I do not impugn their integrity because it is straightforward speculation—and the massive sums for underwriting and other services, about which we wish to have more details, make that arrangement totally unacceptable for the disposal of Britoil. That being so, we wish to have a clear and early statement from the Government stating, first, that they will suspend the disposal of Britoil shares until the market rises. That is what any sensible person would do if he was divesting himself of his personal income or assets. Secondly, the delay will give the Government time to come up with a much more satisfactory system which would avoid the sort of financial patronage that I do not believe any Minister wishes to take upon himself.
I do not wish to be entirely negative about the matter. The Spectator,  which took a different view from the Financial Times,  suggested that we might change to the American system. For a long time I supported much lighter control of the stock market. I believed that we should


move through the voluntary principles and regulations towards a form of security commission. As one scandal unfolds after another—I am not referring to the Amersham scandal—I am sure that the Under-Secretary of State knows about some of the matters that have been rightly condemned by his party as the "unacceptable face of capitalism" and in even stronger language.
The Spectator states:
On Wall Street a selling syndicate of underwriters and distributors outbids rival groups for the issue and then makes itself responsible for distribution.
I do not agree with that, but at least we would know what was going on. We would at least be able to say that there was a competitive tender and that there was no question of patronage. It is an impossible position for the Government.
Some way of handling the situation must be found to avoid that problem. The only sensible thing for the Government to do is to postpone the whole concept of selling Britoil, take the heat out of it, let the market revive and in that time talk to the Governor of the Bank of England and come up with a sensible scheme that we can all support. We might not agree with the objective of the scheme, but at least we should be able to agree that the scheme is in the national interest.

Mr. Robert C. Brown: I congratulate my hon. Friend the Member for Aberdare (Mr. Evans) on doing a public service in giving us the opportunity to debate the scandal of Amersham International. It is disgraceful that we have had to wait for this opportunity for a public debate on this disgraceful episode in the history of British industry.
On Thursday 25 February private investors made millions of pounds profit from the Government's sale of Amersham International. It was wrong in the first place for this successful radioactive materials producer to be sold off. However, the incompetent arrangements for the sale of Amersham mean that the taxpayer has lost over £20 million on the deal.
The Government selling price of 142p per share valued the company at only £71 million. Within two days of the shares being quoted on the stock market they were being sold at 193p per share. At this price Amersham is worth £96·5 million. In other words, the stock market valued the company at £25·5 million more than the Government did. Anyone who bought the shares at the original 142p could have sold them for 193p within a few days. That is a 36 per cent. profit for doing nothing for the economy of the country.
Obviously, many people made huge profits from the sale of public assets. If the company had been correctly valued by the Government there would have been no profit for the speculators and the taxpayers would have been £25.5 million better off than they are today. There was clearly a major blunder by the Government in their handling of the sale. With such a large loss to public funds we are surely entitled to some assurance that the mistake will not be repeated.
Tory Members continually prattle about being the Government of business, and the electorate at large tend to believe that this "Government of business men" have a

far better idea of how to manage the nation's finances than the Labour Party. I hope that the electorate take note of what has happened with Amersham International.
Merchant bankers were paid large amounts for the wrong advice. This is another example of wasted public money. The full details of exactly how much the Government spent organising the sale, and the possibility of any refunds, should be investigated. The whole scandal is yet another example of the unacceptable face of capitalism to which the right hon. Member for Sidcup (Mr. Heath) so rightly referred some years ago.
On the Thursday that the shares were first traded on the stock market crowds of brokers jostled for position as millions of pounds were made in speculative profits. I felt a bit sick when I watched those pinstriped bovver boys almost knocking themselves over to get into a position of influence for the shares. By selling off Amersham at cut prices the Government effectively gave £25½ million to private investors. That £25½ million should have gone to public funds, but instead it has been passed to assorted speculators, for that is what they are.
Vast amounts of money are available when speculators see the possibility of a quick kill. The Amersham International share offer pulled in applications worth £1¾ billion. That money was produced because of the desire to profit from the Government's cut-price sale. Surely it would be better if such vast sums were invested in British industry, instead of waiting for speculative profits at the public expense.
The whole policy of selling off public assets has been a disgrace and a scandal. In this case, the public have not only lost the ownership of Amersham International, but Government incompetence has lost over £20 million from the sale. Bankers and financiers may have advised the Government, but, in the final analysis, it is no good the Government or any member of the Government saying that anything other than their incompetence led to this disastrous result for the British taxpayer. The only people who have benefited are a small number of speculators, and they are the last people who, in my view, deserve any help from Government or public funds.
Let us make no mistake about it. This must have been one of the quickest rip-offs that there has ever been in the name of privatisation. I would say here that I object to the word "privatisation", particularly in the context of Amersham International. It is not privatisation; it is piratisation. It is a case of looting the public purse, and ripping off the British taxpayer.
The Secretary of State for Energy should be eternally grateful that he was not born in an earlier age. Clearly if he had been born 300 or 400 years ago he would have been impeached on a treason charge, and he would have finished up hanging by his neck. I am very much anti-capital punishment, so even I would probably have pleaded for the right hon. Gentleman, to prevent him from hanging by the neck. However, I would have urged that his life sentence should be for the rest of his natural life. Certainly, he should never be let loose on the British taxpayer again.
Unfortunately, we are still in the late twentieth century. Here in this House of Commons, upstairs in Committee Room 11, the Secretary of State for Energy continues his rape of the British taxpayer, as the Oil and Gas (Enterprise) Bill guillotine goes rapidly on its way. Two of Britain's few industrial successes—the British Gas Corporation and the British National Oil Corporation—are


destined for the knacker's yard of British industry, for purely political dogma, by this Government, who firmly believe that a publicly owned industry that makes a great deal of money for the taxpayer should be treated as a social evil and done away with. That is the philosophy of the Conservative Party, and that is why it is engaged on such a large scale in selling off public assets at rock-bottom prices.

Mr. Lawrence Cunliffe: First, at the risk of boring the House, may I place on record the events that took place when this sale was predestined 12 months ago, when my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) and I voiced our objections and accusations in the Atomic Energy (Miscellaneous Provisions) Bill. At the risk of being accused of being a little vain, I must say that we prophesied that the Bill, later to become an Act, would backfire on the Government of the day.
In Committee we constantly and persistently expressed anxiety about what we thought was a fairly predictable situation. Obviously an Opposition fight in Committee on the basis that they represent a given political philosophy. It was obvious that there would be considerable ideological conflict. It was also reasonable to predict that when the Government announced the sale of Amersham International a gilt-edged investment would be presented that would prove to be a bonanza for those who had the most to invest in a "sale of the century".
The reasons were clear. In Committee we were given an exposition of a firm which had shown great initiative, enterprise and impeccable industrial relations, which had been fairly successful in its financial and productivity norms, and which was a classic example of a flourishing enterprise. It is obvious that the speculators, and those with some financial vision, were waiting in the wings for when the market was right for them to come in like financial vultures and immediately pounce on the offer, which has proved to be a terrific blunder by the Government.
Why were these serious errors of judgment made by Morgan Grenfell and the other merchant banks? It was elementary to a sixth-former with any sense of economics that this was an opportunity that would guarantee, as we used to say in the old days, a "Stop me and buy one". The shares were bound to be a profitable investment. This was pointed out time after time in Committee by my hon. Friend the Member for Merthyr Tydfil. He reiterated what is now history.
We presented the case just over a year ago. Amersham International had much to offer. The company had shown tremendous initiative and enterprise. From the time it was established in 1971, the turnover of the company rose from £8 million to £50 million annually—as my hon. Friend said, not bad for a nationalised concern. Its turnover was matched by excellent profits—£26 million in that period, with an average return in group capital investment of 26 per cent. Therefore, this was a company presenting itself as a gilt-edged investment that, frankly, could be backed for win and place with an instant return.
The main shareholder was the United Kingdom Atomic Energy Authority. The dividend for 1971–72 was 10 per cent. In 1972–73 it was 10 per cent., in 1973–74, 7 per cent., in 1974–75, 11…9 per cent., and the same the following year. In 1977–78, the dividend was 8·2 per cent., in 1978–79, 22 per cent. and in 1979–80, 12 per

cent. It was obvious that the company was doing extremely well. The taxpayer was getting a return on his investment and there were no risks attached to it.
The company had been making profits and paying good dividends and returns to the Government—in other words, the people. It was the people's firm and the people's investment. It was paying good returns to the people for their confidence. That was the philosophical approach and the political argument that the Opposition presented.
The Government argued that a gigantic privatisation scheme would reduce the public sector borrowing requirement. The Committee that is considering the Oil and Gas (Enterprise) Bill is especially unfortunate in having the present Secretary of State for Energy presiding over the Department. Before he was appointed Secretary of State he was Financial Secretary to the Treasury.
It may be said that Amersham International was a successful venture for the right hon. Gentleman. ft is estimated that when he was a member of the Treasury team there was an overspend of £4 billion to £5 billion, which naturally had had an effect on the public sector borrowing requirement. Treasury Ministers were claiming that they had a magical formula that would lead to a monetarist miracle. Great visionaries were telling us that if we controlled the money supply, gave incentives to the people and made a few artificial tax cuts in Budgets, the result would be that there would be a galaxy of entrepreneurs.
I had some interesting conflicts with the Financial Secretary to the Treasury before he was appointed Secretary of State for Energy. At the end of the day the judgment was not made by the Treasury from which the right hon. Gentleman was exiled. The merchant banks made a judgment that was wrong to the tune of £25 million to £27 million. I suppose that that represented an achievement for the right hon. Gentleman.
Why did the merchant bankers make such a serious error of judgment? Amersham International may prove to be not the only example of an error of judgment of such magnitude. The Government are constantly practising hiving-off and creaming-off operations. I fear that when they come to hive off the BNOC assets there will be a repetition of the Amersham International error. That must not happen, because the British people insist that such an error must not be allowed to recur.
The Amersham International hive-off was not left to the free market mechanism. It became a financial fiasco and a total embarrassment to the Government. I congratulate my hon. Friend the Member for Aberdare (Mr. Evans) on presenting a wonderful A to Z analysis and exposition of the Amersham International disaster.
Let us consider some of the historic events. It was put to my right hon. Friend the Member for Leeds, South (Mr. Rees) that there had been misjudgments and errors by the Labour Government, and he freely admitted that. But of the famous D-day of 25 February this year, it was said:
More than half the shares in Amersham International changed hands in hectic dealing … as the radioactive chemicals group it made its stock market debut.
That is how the Daily Express,  which is certainly not allied to the Labour cause, described it. It continued:
To the sounds of cheers from dealers trying to buy and sell stock, Amersham shares began trading at 190p compared with the 142p at which they were offered last week.
Overnight, the kill was made and, as my hon. Friend the Member for Aberdare said, the speculators made a very rapid 33 per cent. profit—those lucky enough to get a stake in the group, as it was very limited. My right hon. Friend


the Member for Leeds, South has asked who got the shares, what was the percentage take-up by speculators, whether the individuals and firms will be known to us as a matter of public accountability, and so on. That very day, the stake in the group attracted a record £1, 750 million investment for the £71 million of shares. Out of 265, 000 applications, a lucky 65, 000 investors were allocated shares, so the issue was oversubscribed, as we knew that it would be. As we had said, it was the sale of the century.
The Government had had experience in this. There is no doubt that Cable and Wireless was undersold to the tune of £184 million. The Government should have learnt from that bitter experience. But what happened? Once again, in their airy-fairy manner, they went off to the merchant bankers, who were on a very good wicket. As for the conditions offered to the advisers and underwriters, my hon. Friend the Member for Blaydon (Mr. McWilliam) may think that 1¼ per cent. is a minute percentage, but when one considers the capital involved it is clearly a very lucrative return. Included in the fees were substantial amounts for advice and underwriting fees at 1¼ per cent. amounting to £890, 000, making a total of £2¼ million.
That is what can be earned selling shares short. There is no risk. It is a guaranteed return. It does not matter whether one is £27 million out in one direction or £50 million out in the other. It is a very lucrative picking. No penalty clauses attach to underwriters and advisers. My hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown) suggested that there was a moral commitment, but they do not have to come back and do penance and there is certainly no financial retribution for mistakes of this kind.
The Government argued that they doubted the keenness of the public to buy shares. That is nonsensical. We have already proved that here was the golden egg—the golden calf—ready to be sold off. The over-subscription was five times the expected requirement. A Government who had doubts about the public's keenness to buy shares should have taken steps to ensure that the total shares were not put on to the market immediately but over a period of time. The sale could have been spread out so that it would not have been a straight disaster, as it was in this instance. This is what happens when share prices collapse.
Some of those more professional than ourselves in this field may have said that there is a degree of predictability. It is no use merchant bankers saying that there must be some flexibility. There has to be some margin, but in this case one ventures to say that it was rather substantial. There is a genuine anxiety that this could happen again. If there is a conflict between the Treasury and Energy Ministers on this particular issue, is there any reason why that state of affairs should not exist in the future? Have we any commitment from the Government that that will not be the case? Will they produce a formula for tendering? The amazing fact is that, had it been left to the ordinary market mechanism, who knows what would have happened? Or shall we say that the Government must fix a price? Which way do you play the record? I put it to the Minister that nothing that the Government did or said suggested that they thought that there was any chance that this event would occur. The Government substantially underwrote the issue price. The City advisers got it wrong

by 30 per cent. Despite that, the Government still advised that the underwriters should receive £890, 000 at the cost of the taxpayer.
I take a fair view and I want to be honest about this. It is true that there can always be a margin of error in this particular field. However, when it comes to guaranteeing £890, 000, regardless of whether there is a return on the investment, there is a serious doubt. In the whole of the Amersham scandal the greatest single indictment of the Government is that they permitted there to be payment of large amounts of money to advisers and underwriters. An ordinary sixth-former could have done as good a job and might—"might" because to a large degree it is a speculative gamble—have returned a better price.
On the Oil and Gas (Enterprise) Bill Committee the hon. Member for Derbyshire, South-East (Mr. Rost), has time and time again produced different formulae and amendments aimed at obtaining a better distribution to the ordinary people. They matter because it was their investment in the beginning; it was their firm until the Government changed the mode of ownership. Some of my right hon. and hon. Friends in Committee would have supported even that kind of formula which would have given a wider distribution to the ordinary British people. We may disagree ideologically and politically about the Government's approach, but if we can salvage something from the wreck for ordinary people, we shall have done a useful job.

Mr. Frank Haynes: I do not believe for a moment that there will be a rake back for the public. Rake-offs will continue as long as the Conservative Party is in power. In the United States of America in the 1920s and 1930s people such as Machine-gun Kelly, Al Capone and Dillenger were known as gangsters. That is what the Government are. They are gangsters, who rob the public to feed, once again, the rich who have supported that party over the years. At the same time, the Government are repaying them for services rendered.
It would be interesting to know how many of those who have joined in the rake-off hold Conservative Party cards. However, the Minister will not give us that information tonight. In my beautiful county, we still hear the story that Robin Hood robbed the rich to feed the poor. In this case, it is the other way round. [Interruption.] I shall come shortly to the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). The Government are robbing ordinary working folk in order to line the pockets of the rich.

Mr. Beaumont-Dark: Ah!

Mr. Haynes: The hon. Gentleman may say that, but he is one of the rich. I remember some of the things that the hon. Gentleman said to me in private when we first became Members of Parliament. I do not forget. We were talking about money.

Mr. Beaumont-Dark: The hon. Gentleman has not sent me any yet.

Mr. Haynes: I remind the hon. Gentleman that a collier who has worked underground for 30 years or so cannot be kidded. Colliers know what life is all about and may know what fiddles are all about too. It is never long before a Government Department nips in to fiddle the ordinary working man. Conservative Members often talk


about people overclaiming for social security benefits. They talk about malingerers and scroungers. We do not need to talk about them tonight. We are talking about Amersham International and the rake-off that has been made without lifting a finger or doing a ha'p'orth of work.
Unless the people are prepared to say that enough is enough, such things will continue. The workers of this nation will stand up and be counted in opposition to some of the Bills being debated upstairs, particularly the Employment Bill. The Government will have to take note of that. It is not a question of the Government learning from their mistakes. The Government have a deliberate policy when it comes to selling such companies—they want to fill the pockets of the rich. That will go on and on. We shall argue until the day is long and until the year's end, because it is the Opposition's job to draw such matters to the attention of the people. It is high time that the people woke up to what is going on.
I support everything that has been said by my hon. Friends, and particularly by my hon. Friend the Member for Aberdare (Mr. Evans). It was a first-class contribution. The hon. Member for Selly Oak probably was not here for it.

Mr. Beaumont-Dark: Indeed I was here for all of it. I have a good constitution.

Mr. Haynes: I apologise; the hon. Member was in for part of it. It was a clear picture from A to Z explaining in detail what this was all about. I am glad that I have contributed to the debate.

The Under-Secretary of State for Energy (Mr. John Moore): We have had what can only be described as a lengthy debate. I have to start by saying that I must share with my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) a sense of confusion almost about the nonsense I have heard up until and during the debate on the subject of Amersham.
I would go along with some of things said by the right hon. Member for Leeds, South (Mr. Rees); this reflects part of what is wrong in this country. There has been a sterility about much of the discussion. It has brought out all of the envy that lives within many Opposition Members.
The hon. Member for Aberdare (Mr. Evans), with whom I have had many detailed discussions, as I have with other hon. Members opposite whom I regard as friends, on the subject of coal, almost relished such words as "speculator", "rip-off', "rake-off', "scandal", "diabolical", "disgusting" and "financial vultures". It was the deep relish and joy shown by some hon. Members opposite—I exclude the right hon. Member for Leeds, South and the hon. Member for Blaydon (Mr. McWilliam)—which has created so many of our difficulties. I take no pleasure in having to say that.
The hon. Member for Blaydon made some excellent points that merit attention. The hon. Member for Coventry, North-West (Mr. Robinson), who was courteous enough to apologise for the fact that he had to leave before the end of the debate, also made a thoughtful and useful speech, with many comments and suggestions about the future as opposed to problems that some people might have thought about in the past.
What 1 found most distressing was that very little, if any, reference was made to the company and its potential

for those who work for it. The hon. Member for Merthyr Tydfil (Mr. Rowlands) and the hon. Member for West Lothian (Mr. Dalyell) have taken a deep interest in the well-being of the company. I wish more had been said by hon. Members about the company and its future, and the future of the employees.
The right hon. Member for Leeds, South was right to say that it would be wise to try to get as much as possible on to the record and to respond to the opportunity given to us by the hon. Member for Aberdare by raising it in the Consolidated Fund Bill debate.
I make no apology for starting with principle. The Government came to power—and they had electoral support for these principles—with a firm commitment to remove what they saw as the dead hand of State control. I make no apology for the fact that I have philosophical attitudes in politics. The Government wish to do so not in a spirit of malice or destructiveness towards the industries concerned but in a spirit which would give them freedom from public sector constraints which has left them paralysed, as the hon. Member for Merthyr Tydfil would see if he raised his eyes and had a little vision. [Interruption.] I have waited patiently throughout the debate and I shall try to get some aspects of the subject on to the record because the debate merits something being on the record, but I must deal with the principle first.
The policy of introducing private capital into the public sector has been commended on both sides of the House. I have respect for the way in which the right hon. Member for Leeds, South has, in so many debates on energy, seen the possibilities of change in that direction. The present Government were determined to achieve genuine public ownership, as opposed to the prevailing situation in which industries, while nominally owned by the taxpayer, were in fact often nothing more than the chattels of politicians and civil servants.

Mr, Edward Rowlands: How can the hon. Gentleman read this nonsense?

Mr. Moore: In the light of our policy commitment to free public sector assets wherever this was practicable and in the interests—

Mr. Rowlands: This is not correct.

Mr. Moore: Some of us have exercised inordinate patience over the constant sedentary interruptions of the hon. Member for Merthyr Tydfil.
In the light of our policy commitment to free public sector assets wherever this was practicable and in the interests both of the nation and of the company concerned, the Government took powers under the Atomic Energy (Miscellaneous Provisions) Act to enable the sale of up to 100 per cent. of the shares in Amersham International to take place.
The Government believed that Amersham had no sensible role to play in the public sector. Although it was—and is—a successful company, it was not a natural candidate for continued State control. [Interruption.] The Government have the privilege and the right to argue their politics and their philosophy, just as the Opposition have.
There were no national strategic implications involved in the Amersham sale. There were several millions of pounds of public money tied up in the company winch could be more usefully employed elsewhere. The sale of shares offered the prospect of giving Amersham's


employees the chance to acquire a real stake in their life's work, a chance that I know was welcomed by Opposition hon. Members. My hon. Friend the then Under-Secretary, now the Minister of State, Department of Industry, successfully took the Bill through the House, and the principles were extensively debated by hon. Members on both sides.

Mr. Ioan Evans: Is not the hon. Gentleman condemning every Conservative Government since 1940? It was a coalition Government that set up the firm and kept it in the public sector. In 13 years of Conservative Government it was still kept in public ownership. The present Government are unique in throwing public assets to the financial speculators. No other Conservative Government since 1951 have done that.

Mr. Moore: I shall a little later correct the hon. Gentleman's inaccuracies about Amersham. It is part of the reason for the sterility of the debate that Opposition hon. Members are still trapped in a static, unchanging society.
I remind Labour Members of their own actions when in Government. It is worth reminding the whole House that the Labour Administration of 1970 planned legislation to allow the formation of Amersham into a Companies Act company and to permit the sale of a minority stake. [Interruption.] I am trying to put all the facts on the record, which will benefit the hon. Member for Merthyr Tydfil. Obviously, therefore, that Labour Government saw the benefits of private sector involvement.
The Conservative Government who took over in 1970 enacted legislation on much the same lines as had been planned by their predecessors—the Atomic Energy Act 1971. The 1981 Act simply extended the principle established by the 1971 Act but permitted the disposal of 100 per cent. of the shares.
What were the Opposition objections to that extension of principle? So far as one can judge, they were worried that the company's independence could be lost if a majority of the shares were freely traded on the Stock Exchange. That was a proper concern, reflecting the views of the company and its employees, and one to which the Government were very much alive.
Apart from that fundamental concern, the Opposition expressed a wish for the employees to be given an opportunity to participate in the company—again reflecting the known views of the employees—and a fear that the Government were interested only in maximising the proceeds to the Exchequer, regardless of the company's long-term interests. Those are concerns which the Government have been at pains to explain that they share.
The first consideration in the Government's mind was to allow the company the full, independent freedom of the private sector; to offer it and its employees the chance to prosper by virtue of their own decisions—[Interruption.] I accept the political ideology that is at the back of our own philosophy here to release Amersham from the constraints of the public sector and to offer it the chance to realise its potential in terms of growth and long-term employment prospects.

Mr. Deputy Speaker: Order. The hon. Member for West Lothian (Mr. Dalyell) knows that if he wants to intervene there is a proper way to do it. We cannot have a running commentary.

Mr. Tam Dalyell: What precisely were the restraints of the public sector in relation to Amersham?

Mr. Moore: The Government believe—it is hard, I know, for those who have totally contrary philosophies—that the innate restraints of being within the public sector diminish the potential for corporations and individuals to grow. That is a belief that the Government hold. They equally decry the Opposition's version as to their own particular philosophy.
I will not mislead the House by claiming that every one of Amersham's employees was wholeheartedly in favour of the share sale at the outset. Their caution was very easy to understand. It was a case I believe of "better the Devil we know" than the risks of the vast unknown.
But, at the end of the day, the staff representatives made it clear to us that they would be more than content for the sale to go through, provided that two important considerations were met. Those considerations were that employees should be allowed fully to participate through ownership of shares and that the independence of the company should be maintained. A crucial feature of the debates in which I have fully participated, visiting offices, as one should, management and employee representatives.
The Government took those considerations very much to heart, and therefore approached the share sale with four key objectives. The objections were, first, to preserve the firm as an independent, British company; secondly, to maintain the sense of commitment by the staff, which has been the mainstay of the firm's success; thirdly, to ensure as wide a spread as possible of share ownership amongst the general public and the company's employees; fourthly, to achieve a good return for the Exchequer.
I gave careful thought to the order in which I would list those objectives in this debate, and I should like to elaborate upon them to demonstrate to the House that they have been successfully achieved because the right hon. Member for Leeds, South quite rightly asked us to explain the thinking at the back of much that has occurred.
I should also like to point out that, happily, there was a marriage of true minds on many of these objectives between Her Majesty's Government and Her Majesty's Loyal Opposition.
I shall come later to the objective of achieving a good return for the taxpayer. For now, I shall simply say that the taxpayer has obtained a very fair deal. But as will, I hope, be clear from my list of objectives, maximising the proceeds of the sale for the Exchequer was far from being the only aim in view. And it has been a source of substantial comfort to me to have had the hon. Member for Merthyr Tydfil confirm the propriety of that stance when he expressed the Opposition's view that selling
to … the highest bidder … would … not be in the interests of those who work there or in the interests of the nation".—[Official Report,  10 February 1981; Vol. 998, c. 56.]
The right hon. Member for Leeds, South referred specifically to additional quotes. I have referred to all the relevant Committe proceedings. The hon. Member for Leigh (Mr. Cunliffe) also made a significant contribution in that regard. The right hon. Member for Leeds, South has referred to comments in Committee to the effect that the issues should not be made in an uncontrolled way. The


reference to the lack of control was related to the risks of takeover against which the company, as a consequence of Government action, is now protected rather than any suggestion of a major over-subscription or opening premium. There may now be new financial geniuses, but such views cannot be discerned from a close examination of the Committee proceedings.
I recognise the point made by the hon. Member for Merthyr Tydfil. I thought that it was sufficiently important for the Government to take the necessary action to ensure protection in relation to the problems of maintaining an independent company.

Mr. Rowlands: Does the hon. Gentleman agree that the sum total of all these discussions was that 25 million shares changed hands on the first day? Hon. Members have argued that this was nonsense. We believed that the majority of shares should have been retained by the Government and the staff. The hon. Gentleman must place his quotes within the context of the many debates in Committee.

Mr. Moore: I read every debate. We are trying to deal with a long-term solution that has the interests of the company, its employees and our country at heart. It is not something that reflects only one day's activity in the market place.

Mr. Rowlands: Will the hon. Gentleman give way?

Mr. Moore: I shall not give way again. The debate has been dominated by Opposition remarks completely irrelevant to the long-term interests of the company and its employees.
If maximising the proceeds to the Exchequer had been the Government's sole consideration, we should have set aside the concern of the employees and of Opposition Members and simply sold the company lock, stock and barrel to the highest bidder. This would have been a corporate buyer, and almost certainly a foreign corporate buyer. The truth was seen by both sides of the House. By so doing, we should undoubtedly have achieved a higher valuation. But we should have failed in our highly desirable objective of maintaining the company as an independent British concern.
As it is, Amersham's new articles of association have been devised to prevent any single shareholder or group of shareholders from acting in concert, whether foreign or British, and building up a stake of more than 15 per cent. in the company. Again, I am sure that the hon. Member for Merthyr Tydfil will wish to applaud the Government's success in achieving this objective, by which I know he set great store. I quote him once again. On 12 April 1981 he said:
we feel very strongly that we should ensure that either a minority or a majority shareholding should not fall into the hands of a foreign company. We also need to safeguard the integrity and independence of The Radiochemical Centre".—[Official Report, Standing Committee A,  2 April 1981; c. 39.]
I hope that the House will agree that the Government have succeeded in meeting that demand.
The Government's second objective was to ensure that the company's employees were given a full chance to participate in their own company through share ownership. Generous arrangements were made to encourage employees to participate. Each United Kingdom employee was offered £50 worth of free shares in the company.

Furthermore, for every share bought by an employee, he or she was offered one additional share free up to a value of £500 per employee.
Finally, additional share applications by employees were allotted in full. This met with an excellent response, with the result that employees now own 1, 783, 350 shares, or 3·6 per cent. of the total issue.

Mr. Rowlands: It is derisory.

Mr. Moore: It may appear derisory to the hon. Member, but it is not derisory to those who work and value the work that they do in the company.
The hon. Member for Aberdare and particularly the hon. Member for Coventry, North-West asked me how many were paid for fully and how many were free. In fact, 270, 000 of the shares going to employees were free and the rest—approximately 1·5 million shares—were paid for. The hon. Member for Coventry, North-West and the right hon. Member for Leeds, South asked who owns the shares. The shares register will be available in due course. If asked what "in due course" means, I will say it means in April, for the registration from 26 March, and for inspection in Companies House.
I will not breach the confidence of any individual applicants by revealing even their names or those who have been allotted shares. The record will be clear in that regard. Employees will have the opportunity to build on this by participating in the company's continuing share participation scheme and save-as-you-earn scheme.
I am sure that the whole House will share my satisfication that over 90 per cent. of United Kingdom employees are now shareholders in the company. For the great majority of people, including the hon. Member for Coventry, North-West, the right hon. Member for Leeds, South and many Opposition Members, that is the right sort of public ownership.
It would thus seem that the reasons that the Opposition have put forward over the past year for objecting to this disposal should have evaporated. But has that stopped them trying to find objections? Clearly it has not. Having had the carpet well and truly pulled from under their feet, they have turned in desperation to criticising the manner of the disposal.
The right hon. Member for Leeds, South rightly asked for as much information as possible, on all the areas he correctly questioned, to be put on the record, in contrast with the peculiar ribaldry among other members of the Opposition Front Bench. Their main objection is that they consider that the Government could have raised more money for the Exchequer if they had done things differently. I shall comment in a moment on the misconceptions underlying this view.
However, the first point to make is a much more fundamental one. Opposition Members are saying that we should have maximised the proceeds of the sale. The question I would put to them is whether they think that maximisation of proceeds is the single criterion that should have been adopted in selling this company, or whether other policy considerations should be allowed to influence the decision. The Government have tended to think the latter. I should be surprised if I found Labour Members embracing the former, particularly in view of their earlier statements. I hope it is common ground that financial considerations must be weighed alongside political objectives, and that the maintenance of Amersham's


independence, the incentives to employees to hold shares and the encouragement of widespread shareholdings by small private investors are all objectives which may have to detract from the absolute maximum that could have been achieved.

Mr. Robert C. Brown: The hon. Gentleman must feel that he is faced by a really unholy alliance tonight. Not only are Her Majesty's Opposition against him; the editor of the Daily Express,  who has condemned this proposal just as much as we have, is against him.

Mr. Moore: As the right hon. Member for Leeds, South said earlier, we all have to face the press. None of us believes that the press would support us on every issue. However, we are trying to debate, discuss and put on record the Government's views on the subject in detail in response to the debate. I shall seek to do that a little longer and then—

Mr. Rowlands: rose—

Mr. Moore: I shall give way in a moment. The hon. Member for Merthyr Tydfil is impatient, but I hope that he will bear with me.
That brings me to the Government's third objective, which was to ensure a wide spread of participation by the general public. It was for that reason that the Government chose to offer the shares for sale at a fixed price rather than by tender.
Claiming to be wise after the event—it is a legitimate crime of all politicians—Labour Members have had a great deal to say about the merits of tender offers, so I shall take a little time to explain the complex issues involved. I do not know whether I need to do that in quite so much detail with the hon. Member for Blaydon whose remarks on the subject I respected and listened to with great care. These are complex issues which must be faced by those of us who must make decisions rather than those who merely criticise and make debating points after the event.
The tender approach—which we considered very carefully—suffers from a number of disadvantages, mainly stemming from its relative unfamiliarity. Labour Members may not be aware that there have been only four tender issues in the past five years, that the largest one was the Habitat issue last year which raised £26 million, and that the number of applicants that those issues attracted was a few thousand. That last characteristic is the important one. It shows that, however irrational it may be, investors are deterred from applying in the case of a tender. And in all probability the sort of investor who is deterred is the small man who is unfamiliar with the arrangement, while the sophisticated City money man and the institutional investor will know what to do. I wonder whether the critics of the Amersham issue are really saying that they would wish to have seen the issue arranged in such a way as to ensure that the professional institutional investor gets an inside track, and that a relative handful of applications are received from the small investor. Is an initial application list numbering a few thousand the right way to approach the encouragement of wider share ownership? I have no doubt that with a tender the institutions would have snapped up the issue on day one.
But it will be said by Labour Members that at least a tender would have raised more money and, given the

enormous response to the fixed price issue, surely we would have expected a very good response to a tender. Not so. The level of subscription for a fixed price issue is no guide to the genuine investor interest. Once the idea that the issue would be significantly over-subscribed had taken hold, due to some fairly speculative long-term profit forecasts being given a great deal of publicity, applicants wishing to acquire a stake knew that they would have to apply for many times the number of shares they genuinely wished to end up with, and the effect was self-generating.
In the absence of that sort of speculative fever, and given the unfamiliarity of the tender approach, I venture to suggest that the level of interest would have been very much less both in terms of shares applied for and numbers of applications, and that it is by no means clear that we would have achieved a striking price higher than the fixed price of 142p. Certainly there was a real prospect at the time when the decision was taken—I shall go into all the details, as the right hon. Member for Leeds, South asked me to—of a tender raising less money than the fixed price.
All those uncertainties point to a greater risk of a flop with a tender. The Opposition may be prepared to gamble with public money, to risk getting the company and its employees off to a bad start, and to deter the small investor and the employees from investing, but that is no way for a responsible Government to behave. It was not an easy decision to make but I have no doubt in my mind that a fixed price offer was the correct decision in the case of Amersham.

Mr. Merlyn Rees: The hon. Gentleman is entitled to argue for the decision that the Government took. However, I want to make it clear that nobody on the Labour Benches has argued for the tender issue. All we had was a quotation from The Daily Telegraph,  which argued that way.

Mr. Moore: I shall recheck my memory of the debate. I have been in the Chamber throughout and I thought that I had heard, at least twice, suggestions to the effect that more money would have been raised in this way. I apologise if I am wrong. It would seem that this is a more than germane aspect. The right hon. Member for Leeds, South, as opposed to other hon. Members who wander into the debate late at night and feel that they can participate from below the Gangway, has rightly asked for as much as possible on the subject to be put on record. In all the debates that we have, that is the right way to tackle the issues of importance.

Mr. McWilliam: I must confess to the fact that I raised the tender issue when I argued that it would not have raised the maximum amount of money.

Mr. Moore: I was, rather unwisely, going to compliment the hon. Member for Blaydon on one or two aspects of his speech.

Mr. Dalyell: Is it the opinion of the Government that in fixing the price at 142p there was any underwriting risk involved? Is it not the case, as my right hon. Friend the Member for Leeds, South (Mr. Rees) said, that Rothschild, by fixing the price at 142p, was making sure that the underwriting risk—which was amply rewarded—was virtually non-existent?

Mr. Moore: It was unwise of me to give way at that point, because I said that I would try to cover thoroughly all aspects of the question and this is one crucial aspect to which I shall come.
By opting for a fixed price sale, the Government believe that they were able to ensure that small investors got a good crack at the whip. Shares allocated to small investors totalled 22·6 per cent. of the issue. As their applications represented only 12 per cent. of the total applications, the House will agree that their interests were well satisfied.
The fourth Government objective, and this is germane to the points raised consistently throughout the debate, was to achieve a good return for the taxpayer. The hon. Member for Blaydon particularly dwelt on this point. I am glad to say that taxpayers have been amply rewarded. The Amersham sale realised about £63 million for the Exchequer and this must be seen against the total Government investment over the years of just £6·3 million, as opposed to loan capital, that is still outstanding with the company. So the taxpayer has got his money back 10 times over. I call that a pretty good deal.
As for the Exchequer's costs for the sale, and I shall be going into as many details as I can, these amounted to about £2·8 million including duty and tax. The Bank of England had the benefit of the application moneys between the allocation procedure being agreed and the posting of letters of acceptance of cheques. That was sufficient to cover the taxpayer's costs. I shall come to the breakdown of the details later.

Mr. Ioan Evans: The hon. Gentleman is surely misleading the House when he talks about only £6 million of public money being invested in the firm. As I pointed out, in May 1981 a company opened in Cardiff that is part of Amersham International. It has had public investment of over £20 million. This money has come from the United Kingdom Atomic Energy Authority, which is a publicly owned company. That is public money, so to talk of only £6 million is to mislead the House.

Mr. Moore: Investment in the company over the years has been £6·3 million. The tragedy of this debate is that so few Labour Members have recognised, and reconciled themselves to the fact, that this excellent company is in existence and will have a future with its plant and with its loan stock as well as the equity now in the company.
The company was taken into public ownership in 1946. It paid no dividends at all to the Exchequer until 1971, when it was established as a separate company under the Companies Act. Since then, Amersham's dividends have yielded about £3 million to the Exchequer. So the Government can scarcely be said to have sold the nation's birthright for a mess of potage.
The Opposition have moaned loud and long about the price at which the issue was offered for sale. They persist in saying that the present market price of 190p proves that the issue should have been priced at that level—whether through a tender or fixed price, I shall not pursue. They erroneously contend that that created what they described as a loss. That only demonstrates the naivety of the Opposition's thinking. The price set by the market is that established as a result of a few daily transactions. It does not represent what could be obtained for the whole company. Moreover, the price is probably more influenced by the hysteria surrounding the issue and the

apparent level of over-subscription than by a considered evaluation of the company. I shall not begin to comment on the value of the company, but I suggest to those hon. Gentlemen who were privileged to be present at our debate, that the comments of the experienced hon. Member for Coventry, North-West are worth reading. Indeed, public statements by hon. Members opposite may have served to encourage the present price level. But I wonder whether hon. Members opposite have paused to consider the salient facts about this issue? We were selling all the equity. [Interruption.] The hon. Member for Merthyr Tydfil has a legitimate right to argue his case as he did last year on Second Reading of the Atomic Energy (Miscellaneous Provisions) Bill. His case was lost when the House voted, and the Government have the right to carry out decisions based on that vote.
We were selling all the equity. That was unusual. The safeguards to minimise an unwelcome takeover might have put off investors. The uniqueness of the company made it difficult to compare its value with others. 'The company's profits were unusually sensitive to exchange rate fluctuations, and profits had been depressed for a couple of years. Indeed, the record does not reveal consistent growth of earnings. Furthermore, the weakening of sterling must have been a major contributor to the forecast improvement in profits in 1981–82. The potential for earnings growth was also sensitive to sterling All this was clear from the prospectus.
The offer price of 142p was agreed by the Government, following detailed discussions with Rothschild, with the merchant bank advising the company, and with the stockbroker to the issue. It was the highest price at which they believed that the issue could be successfully underwritten and subscribed. That answers the specific question of the hon. Member for West Lothian. It was higher than some parties to that decision felt was wise. It was also regarded at the time of the offer as relatively high by informed commentators. I shall give illustrations of what was said by informed commentators at the time of the pricing. The Investors Chronicle of 12 February—[Interruption.] Unpalatable facts and truths may upset the Opposition Chief Whip, but they will be repeated from the Dispatch Box. It is extraordinary that, as soon as one approaches facts which are uncomfortable, this kind of ribaldry returns to the debate. I shall simply repeat the facts again and again, because good facts are worth repeating.
The Investors Chronicle for 12 February, the day after the price was announced, said that it was "a shade ambitiously priced". The Financial Times,  on 15 February, said that at a fully taxed price-earnings ratio just under 19—it was 18·9:
this looks pretty glossy dressing".
The Daily Telegraph on 15 February took the view that the price of the shares "is ambitious" and that "the price is high". The Times of 15 February said
The merchant bankers seem to have weighed up the interests of the future shareholders and the Government pretty well".
Let us consider the figures. The multiple of 18·9 times forecast earnings compares with an average multiple of 10·6 times historic earnings for industrial shares generally—

Mr. Rowlands: rose—

Mr. Moore: I shall have a cue for the hon. Member for Merthyr Tydfil in a moment. I continue with the


figures. The multiple of 18·9 times forecast earnings compares with 13·8 times historic earnings for GEC and 17·3 times historic earnings for Marks and Spencer. There were no howls at that time that the price was a give-away, rather the reverse.

Mr. Rowlands: Will the hon. Gentleman now answer the question that he has been asked three or four times? Was it the Government's objective, and did the Government accept the consequence, that half the shares of the company on the first day after the launch would change hands? That was the nature of the speculation.

Mr. Moore: I have endeavoured to put the record clearly. I have made clear the planks of the Government's objective. The Government's objectives, especially the long-term objectives, have been clear to be seen. The vagaries of the hon. Gentleman in his peculiarly well-informed interest, so he believes, in the financial market place is something that we can discuss on another occasion.
The Government could not have offered the shares at a price even remotely approaching the opening price. To say so, as Opposition Members have implied, is sheer poppycock. The offer price was the highest at which the Government, the issuing houses and the broker could responsibly have encouraged the public to subscribe. The early market price is volatile and is not a realistic valuation of a company. Look what happened to British Aerospace shares. They were issued in February 1981 at 150p. They opened at 170p and rose gradually to the very high price of 251p. Then they fell back to 176p, only 26p above the offer price.
British Aerospace issue was, of course, offered for sale under this Administration. As my hon. Friend the Member for Selly Oak said in a speech that I enjoyed in every sense—[Interruption.] The catcall unisons of the Opposition cannot be fairly compared with the excellent erudition of my hon. Friend. Opposition Members might recall that in 1977 the previous Labour Administration sold off some of the Government stake in BP. The 67 million shares attracted applications for 315 million shares. They opened at an initial premium of 68p, rising to 85p on the second day. The difference between the sum realised, and the value put on the shares by the market, was therefore around £50 million in 1977 money equivalent to some £90 million in today's money. This might be thought a surprisingly high figure given that in the BP case, as my hon. Friend the Member for Selly Oak said there was already a quoted market price. The business of the company was well known and understood with many comparable quoted stocks and only a small part of the capital was disposed of. All these factors made the price fixing exercise relatively easy for BP, but they were absent in the case of Amersham.
Another feature of that BP sale that has not been mentioned this evening, incidentally, was that 20 per cent. of the shares were sold in North America. This is not something that the Government were prepared to contemplate in the case of Amersham.
On 4 March, and in the knowledge of the euphoria and the opening price, the Spectator published a long and considered article on the Amersham offer, that has been referred to by the hon. Member for Coventry, North-West. The article stated:

On the basis of what is really being offered in this case, Amersham was substantially over-priced by the merchant bankers, Rothschilds, when they arranged the flotation—a price which represents a multiple of earnings of 19 times the prospective profits of the current year, and about double that for last year must strike any reasonable analyst as very top-heavy. On Wall Street a company of this kind would have been lucky to have commanded half the rating that Amersham did here".
The article went on to describe how investors threw caution to the wind and there was a stampede. It also took the view that Rothschilds had done "an absolutely brilliant job". It ended by saying:
We shall see in due course whether, for buyers of the shares, the issue price, let alone the price which the market has put on the shares subsequently, is justified".
That is the point. Had the offer price been higher, the enthusiasm would have melted away, with the result that the company and its employees would have given a bad start. As it would probably have been impossible to get the issue underwritten, the taxpayer would have continued to be forced to keep his money in an enterprise that has no business to be in the public sector. That may be a result attractive to Labour Members, but not to the Government or the taxpayers of this country. I have described the four objectives that the Government set themselves. The right hon. Member for Leeds, South rightly asked me to deal with this issue with the seriousness that it merits. These objectives have been well and truly achieved. Amersham is now genuinely in public ownership, and public ownership of the right and acceptable kind.
A great deal of rubbish has been spoken, particularly in the House, about the commissions received by Rothschilds, who advised the Government. The right hon. Member for Ebbw Vale (Mr. Foot), no less, alleged:
some of the right hon. Lady's advisers…have made at least £1 million out of it".—[Official Report,  25 February 1982: Vol. 65, c. 981.]
No doubt the right hon. Gentleman gave the prospectus a hasty glance and noted on page 26 that the Secretary of State would be paying £1·155 million in fees connected with the sale, so he jumped to the conclusion that Rothschilds would walk away with that sum. Let me put the record straight. I shall put as many of the details as possible on the record, and I shall write to the right hon. Member for Leeds, South about the others.
Commissions paid by the Secretary of State were: to the underwriters, 1¼ per cent., or £800, 000; to the issuing houses—Rothschilds and Morgan Grenfell—seven-sixteenths of 1 per cent., or £280, 000; to the brokers, A. E. Casenove, £80, 000; making a total of £1, 160, 000. Fees were also paid to others—for example, Coopers and Lybrand, the accountants to the issue; Slaughter and May, the solicitors to the issue; Streets Financial for preparing and paying for the advertisements of the full and abridged particulars in newspapers; and the National Westminster Bank, as receiving banker. The reeiving banker processed 264, 000 applications and handled the allotments and cheques.
I shall write to the right hon. Gentleman giving details of all these fees and those to whom they were paid. The total cost paid by the Secretary of State, including stamp duty and VAT, amounted to some £2·8 million. Obviously, the figure of £4 million in the Amersham Supplementary Estimate was put in in advance of the issue. Naturally, the actual sum charged to the Consolidated Fund will be the actual sum paid. Rothschilds will receive no other fees or commissions.
The right hon. Gentleman also asked who has given whom indemnity. The agreements between the Government, the merchant banks and the company in connection with the issue and the prospectus require the parties providing information for inclusion in the prospectus to indemnify the other parties against claims arising from the provision of inaccurate information. My right hon. Friend the Secretary of State for Energy has given such indemnities to the merchant banks and the company, as is perfectly normal practice in respect of information in the prospectus originating from my Department. The reference in the Supplementary Estimate to the possibility of further expenditure in later years is in respect of any claims which might arise under such indemnities or any costs which at the time that the Estimates were drawn up could not be reliably forecast as likely to be met in the financial year. We are—

Mr. Rowlands: Carry on Rothschild

Mr. Moore: I am endeavouring properly to inform the right hon. Member for Leeds, South about the specific questions that he asked. The right hon. Gentleman asked if payments were made to Rothschilds prior to the approval of Parliament to the issue. It is normal practice for Departments to employ outside advisers on specified tasks which the Departments are not equipped to carry out. Such expenditures are met out the Department's money, voted by Parliament for administrative expenditure. In the case of Amersham, the Department commissioned a specific study from Rothschilds to advise on the feasibility of disposing of the company. The fee for that feasibility study, completed in late 1980, was £10, 000. Clearly a feasibility study has to be completed before there is any sense in seeking any necessary parliamentary approval for carrying out the disposal.

Mr. Rowlands: Carry on Rothschild.

Mr. Moore: I turn to the references made to an article in The Observer on 14 March suggesting that £500, 000 had already been paid to Rothschilds by BNOC for, its work on the issue of Britoil. That is a matter for BNOC, but I understand that the corporation has so far paid no fees whatsoever to Rothschilds for the work which it has done in the last year in connection with the Government's plan to sell shares in Britoil. Obviously, the appropriate disclusure of fees will be made in the prospectus in the normal way.
Hon Members asked about the choice of merchant bankers. The Department in consultation with Treasury and Bank of England officials, drew up a shortlist of four possible merchant banks to advise them on the planned issue. Presentations were made to the departmental officials by the four candidates and Rothschilds emerged as the preferred candidate. The drawing up of the shortlist was handled by officials and the recommendation originated from departmental officials.
The Secretary of State and Ministers—

Mr. loan Evans: On a point of order, Mr. Deputy Speaker. I have a great deal of sympathy with the Under-Secretary, but we have heard scandalous revelations about the costs of disposing of—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that that is not a point of order for me.

Mr. Moore: One of the most depressing features of the House is that those of us who try to put on the record the facts behind an issue are subjected to such interventions.

Mr. Rowlands: Carry on Rothschild.

Mr. Moore: I have been trying to answer the detailed questions. This might be the moment to say something—it is appropriate in view of the sedentary interruptions—about our advisers on this issue, and about the role of the City in general. I think that that is relevant.
I draw attention to the presence of my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke), who has been with us throughout the debate but who has been unable to contribute. He is as conscious as all hon. Members about the worth of the City. It is easy to stand on the sidelines and criticise City institutions such as Rothschild and to question whether they earn their fees. I hope that the House will acknowledge that the City has an unrivalled fund of expertise on financial matters and that it makes a major contribution to the country's well-being—for example in capital raising for industry, insurance, major international fund raising operations and in providing a wide range of sophisticated services for savers. The City is a major employer and a major winner of invisible earnings for our country.
The House is aware that apart from Rothschild which acted as the Department's merchant bank adviser, Morgan Grenfell acted for the company and A. E. Casenove was the broker to the issue. The Government had advice from those three firms on whether the offer should be made by tender or at a fixed price, and on the issue price. The House should know, however, that while advice on whether to go for tender or fixed price was divided, the Government's advisers favoured the fixed price. The Government decided the matter, taking into account that advice and the considerations that I have mentioned.
As for price, there was unanimity among the advisers that 142p was the highest that they could support, and indeed was perhaps higher than was wise. If we had chosen to go for a higher price, we should have been on our own and run the risk of a problem. I am quite satisfied that the advice that we have received from our advisers on this issue has been of the highest professional standard. It does no hon. Member credit to suggest that the advice was tendered other than in the utmost good faith.
In the end, it was the Government who took the decisions. As I have made clear, we stand by those decisions. We think that they best serve the national interest. I suggest that the Opposition should pay a little more attention to the wider consideration which led to our decisions and a little less attention to those people who tell them that the present market price represents the price that the Government could have obtained for the company if we had adopted a different approach.
In conclusion, it seems to me that in the long term the real argument is not the price at which this issue came to market, but the way in which Socialists believe that met, and women at work should be organised. Despite the past 40 years and all the lessons of history, they have still clearly shown—the hon. Member for Merthyr Tydfil constantly reiterates it from a sendentary posture—that clause 4 lives, that the nationalisation of the means of production, distribution and exchange is the root in back of all this debate.

Mr. Rowlands: Will the Minister give way?

Mr. Moore: Not to the hon. Member for Merthyr Tydfil.

Mr. Rowlands: rose—

Mr. Deputy Speaker: Order. The Minister has said that he is not giving way.

Mr. Moore: That is at the root of the debate—not the price of the sale. The Labour Party never believed that the company should enter the free market at all.
We see in freedom from State control opportunities for the employees and benefits for our country from the energies released in freedom and the responsibility of ownership. Socialists shrink from ownership as they do from all reality. We embrace it, knowing how natural it is to the human condition and knowing what responsibility the spread of ownership brings to our country.

Orders of the Day — Industrial Training Boards

Mr. Tam Dalyell: It makes one weep to consider the contrast between the descriptions of the City in the debate on Amersham International and the subject of my debate. The Minister referred to reality. This debate is about the reality of productive industry and the comparatively pitiful sums needed to keep open the road transport industry apprentices centre in my constituency, which my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) visited in his capacity as Chairman of the Select Committee on Employment. A comparison of the amount of money needed to train the apprentices, who, after all, will produce the wealth, with the sums discussed in the previous debate reveals a good deal about the problems of this country.
I am concerned about the chronic shortage of skilled craftsmen that is now predicted for the 1980s by the road transport industry training board and what action the Manpower Services Commission can take to deal with the problem. The number of first year apprentices—mechanics, body builders and vehicle electricians—has fallen by an alarming 70 per cent. since 1979, from 13, 000 to 3, 000.
There are no signs that companies are planning for a higher recruitment in the present training year. There is a disturbing increase in the proportion of apprentice dropouts from a traditional 10 per cent. to 14·5 per cent.— a rapidly rising wastage rate. The 1980 RTIB report predicted that industry would need to recruit about 25, 000 apprentices by 1982. At the end of 1981 the two-year total had not reached 10, 000. That means that the industry is already short of its anticipated needs by some 15, 000 apprentices. Those are the apprentices we all need if we are to have garage servicing, the lack of which people are endlessly complaining about.
In recessionary conditions many transport companies have been forced to cut training budgets savagely. Transport has been particularly badly hit. Can the Government really say that they will do nothing about it and pass by on the other side of the road because it is not their business? Faced with an increase of 7p per gallon for derv, and a number of other economic factors, the willingness of employers to pay for apprentices is reduced even further.
If recovery comes, the transport industry may be one of the first to recover and will need more help. British firms, which achieve a greater efficiency by slimming down their labour forces, often do so at the expense of the national economy. The shake-out of overmanning in industry, coupled with the reduced demand arising from the recession, has produced record unemployment. It is the country that has to meet the cost of the unemployed. Quite simply, the increased efficiency of individual firms is being achieved at a reduced overall national efficiency.
That is why it is so mad, so daft, at this point in time even to propose closing set-ups like the very efficient MOTEC at Livingston. National economic and basic social considerations require that we should do everything in our power to re-employ the unemployed. To close down the centre at Livingston would be to do the reverse of that. It is all very well to talk about industry being fitter and leaner. That might make sense if there were half a million


unemployed, but it makes no sense at all in the context of apprentice training when there are 3·5 million unemployed.
Why is Government funding to be withdrawn from the training board, especially at a time when the Chancellor of the Exchequer, as reported at column 747 of the Official Report of 9 March 1982, is proposing help to small engineering firms? Small engineering firms are precisely those that will benefit from the work of places like MOTEC at Livingston.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that there is nothing about MOTEC in this Vote. The Vote is really concerned with the increases in costs of industrial training boards. Only that can be raised.

Mr. John Golding: On a point of order, Mr. Deputy Speaker. Is not the point at issue that in the Supplementary Estimate the Government provide additional moneys to wind down the training boards' activities? Is not MOTEC one example of the casualties of the Government's decision to withdraw funding from training boards and to provide for a division of particular boards?

Mr. Deputy Speaker: I understand that the Vote under discussion does not relate in any way to MOTEC. It does not wind down MOTEC.

Mr. Dalyell: I gave MOTEC as an example, because—

Mr. Deputy Speaker: Order. I have followed the hon. Gentleman's speech carefully. It is all right to raise a general point, but he should not go into the details of MOTEC.

Mr. Dalyell: I am grateful to the Chairman of the Select Committee, my hon. Friend the Member for Newcastle-under-Lyme, because I have been careful not to repeat the speech that I properly made on Wednesday, in the debate on the Budget. That speech was rightly geared to the particular consideration of MOTEC. However, the general considerations concern, for example, Alex Kitson and Larry Smith, who are on the board of MOTEC and who are to meet the Minister tomorrow. Many of the training boards are research establishments into training methods and techniques. That is one reason why they are so valuable.
I do not want to go into the details of MOTEC now, but where will we find apprentices for auto electrical departments? Small garages and engineering firms cannot provide anything like the simulators and fault detectors found in the purpose-built auto electrical department at Livingston. Many cars have been modified by MOTEC staff so that any number of faults can be introduced into a vehicle's system at the flick of a switch.
The Manpower Services Commission is responsible for about 100 private hirings of the Livingston facilities each year. As members of the Select Committee, such as my hon. Friends the Members for Newcastle-under-Lyme, for Glasgow, Maryhill (Mr. Craigen) and for Thurrock (Dr. McDonald) found, there is a high use rate. That is one of the achievements of training boards. Can it be said that it is an internal board matter to close such a facility? The Under-Secretary may nod his head, but purpose-built

facilities throughout the country are rotting away, although they are geared to the very objectives that the Government claim are important.
What sense does it make to spend money on providing facilities for youngsters under Service auspices to clamber around rocks—which may be estimable in itself, and to which I do not object—when the Government are taking away the facilities that allow them to clamber over vehicles to some definite purpose? Incidentally, 1, 500 of the students have passed their external City and Guilds examination. The Government seem to have a general policy of pushing training initiatives with their right hand and of destroying the wherewithal with their left hand, or at least standing on the sidelines and allowing training facilities to be destroyed. Several unique places—of which MOTEC is only one—have been closed. However, given the Chancellor's statement, those places should be encouraged. We are witnessing an act of irrationality and monumental folly given that the Chancellor of the Exchequer said—as reported at column 747 of Hansard of 9 March 1982—that his main objective was to help small engineering firms.
Employers in some industries have said that they will not pay for the like of MOTEC. If employers take that view, surely the Government have a moral and, I suspect, a legal obligation—but I do not want to try your patience, Mr. Deputy Speaker, by going into the legal obligations of MOTEC preservation—to retain training.
This place had 309, 000 training days behind it. It will not be possible to have such effective training by relying on day release. Some of us do not believe that small firms can give anything like the quality of concentrated training that the training boards have been able to offer. At the same time, the training boards have had close liaison with local education authorities. I give the example of the relationship between Livingston and Mr. Ferry and his colleagues at West Lothian college. I gather that at High Ercall there is a good relationship with Telford. So I do not limit it to Livingston.
What must concern us in this debate is the loss of skills and a situation in relation to road transport where there w ill be no skills centre north of Gainsborough. This is all very well, but it is a bit rough on the North of England, which provides 70 per cent. of the apprentices to Livingston, and on Scotland, which provides 30 per cent.
We are getting back to other North-South problems. As the Minister knows very well, I do not think that anybody is in such a position as I am to argue this case. It appears that the Scots are being discriminated against. The Minister can understand the political consequences of that. The proposals to consolidate—

Mr. Golding: Will my hon. Friend deal with the general question of the absurdity of declaring instructors redundant? He has talked of skill, but I think the Supplementary Estimate includes moneys for the training boards to provide for winding down. This must include this aspect.

Mr. Deputy Speaker: Order. There is provision in the Estimates for the boards which are to be wound up, but we must not have a discussion on general policy. The Vote is much narrower than that.

Mr. Dalyell: I proposed to keep my speech reasonably short, but I can think of no colleague in the House who


would be better placed than my hon. Friend the Member for Newcastle-under-Lyme to deal with that. He knows a great deal about it.
The instructions in these institutions, many of whom are 45, 50 or 55 years of age, are worried. If they get other jobs, they will not be using the skills which they have built up. The training board organisation fired the imagination of many good people. It is a matter of considerable sadness and often of personal tragedy that the hard work which they have put into building up these places will be lost. When the members of the Select Committee have gone round, they must have seen the result of all the work. I do not want to embarrass the instructors but many good men and women have given their lives to what they rightly thought was a worthwhile cause from the point of view of the country. I take my hon. Friend's point.
I do not understand the contrast between, on the one hand, making political speeches about new training initiatives and, on the other hand, closing down the very instrument that would allow those new training initiatives to be usefully and faithfully carried out. I leave it there.

12 midnight

Mr. Hugh D. Brown: The fact that this is a quieter and more reasonable debate than the previous one does not mean that we are not concerned about the issues raised by my hon. Friend the Member for West Lothian (Mr. Dalyell). Any Minister who has to face my hon. Friend in one of my hon. Friend's campaigns had better know what he is on about. We are indebted to my hon. Friend for having initiated this debate.
I make no pretence of being an expert on the subject. I did not serve on the Select Committee on Employment. The particular aspect of the matter to which my hon. Friend referred is not a constituency interest. As a recent addition to the Transport and General Workers Union, I had better tell the Minister that I am concerned about it from the point of view of the union and of employment generally.
Having confessed that I do not have detailed expertise, I believe that I am nevertheless entitled to pose one or two questions. It has already been said that there is a shortage of skills in the road transport industry, and in the future it will be worse.
Knowing of the reputation of the Scottish part of the road transport industry training board, I cannot square what is happening with the Government's declared intention of creating additional training opportunities for young people. It would be a criminal waste of resources, know-how, technical skills, tutoring skills and equipment in the training boards, and particularly in the road transport board, if they closed down entirely, which is a possibility facing that board.
There must be an obligation on the Government, after the time that has elapsed, to state their intentions with regard to the road transport board. They should also state their intentions for the use of the existing skills and facilities, if they take decisions that will ultimately lead to the board's termination.
Therefore, it is not unreasonable that some of us who are expressing concern about the Government's whole concept of industrial training should be relating that concern to the new initiatives announced by the Government. If they mean anything, they must mean an

increase in the use of the existing skills and facilities. The Minister has an obligation to state as clearly as he can the Government's intention with regard to this resource.

Mr. David Marshall: The Government's financial policies will affect the efficiency and safety and every other aspect of the road transport industry.
Organised training through the road transport industry training board has helped to gain the industry the status that it deserves as a key part of the British economy. Eighty per cent. to ninety per cent. of the goods and raw materials in Britain are moved about the country by road transport. It is surprising that only 25 per cent. of the managers in the industry have had any formal training or have professional qualifications. The number needs to be substantially increased, and that will be done only through the training board. Voluntary arrangements for training will not go anywhere near achieving the desired results.
It is significant that accidents involving heavy lorries have fallen by one-third per thousand miles in the board's lifetime. In the same period the number of heavy lorries on the roads has substantially increased. The figures are no coincidence; they are largely due to the high standards of training carried out by the board.
When more and more drivers are involved in international journeys, proper training is essential. The Government have put themselves into the ludicrous position where, on the one hand, their policies have put proper training in peril, and, on the other, there is a considerable lobby in favour of the introduction of heavier lorries. There is also fierce anti-lorry lobbying by environmental groups and others concerned about their impact. Lorries are sometimes depicted as mechanical monsters or juggernauts. One way to ensure that lorries are operated efficiently and safely is to insist on the highest possible training standards for everyone in the road transport industry.
The Government's policies are having the opposite effect. For example, there are training and education facilities at Livingston which are second to none in Europe. It provides training for proper, permanent jobs for thousands of youngsters. It is not a job creation scheme which leaves youngsters unemployed and with no real training at the end. Most of the people who attend Livingston—

Mr. Deputy Speaker: Order. The hon. Member for Glasgow, Shettleston (Mr. Marshall) must speak generally. MOTEC is not referred to in the Vote and is in no way related to it.

Mr. Marshall: I am sorry if I have strayed out of order, but I hope that the Minister will say whether he really wants effective training arrangements in the road transport industry. If he does, it is essential that all the existing facilities operated by the road transport industry training board are kept.

Mr. Dalyell: As a sponsored member of the Transport and General Workers Union, and as one who has great knowledge of the industry, does my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) agree that many small firms simply do not have the facilities—even if they had the wish—to give apprentices


the training they deserve? That fact applies to quite a number of other industries for which the MSC and the training hoards are responsible.

Mr. Marshall: Small firms do not have those facilities. It is essential that facilities are available in different parts of the country. If there is a reduction of facilities in Scotland and the North of England, where will people from those areas receive their training? They will have to travel to The Wrekin or even further south. That will add considerably to employers' costs and to the inconvenience of people being trained. Perhaps if the facilities were in Hillhead, Glasgow, and not in Livingston, West Lothian, they would not be threatened with closure. Is the Minister serious about wanting effective training arrangements in the road transport industry? If he is, he will ensure that facilities are increased and not reduced.

The Under-Secretary of State for Employment (Mr. Peter Morrison): I am glad that the hon. Member for West Lothian (Mr. Dalyell) had the opportunity to raise this debate. I know that he feels strongly about training in the road transport industry. He said earlier that I would understand the difference between the North and the South, and he is right. In earlier days we were campaigners for a cause which was important to us both. The hon. Member for Glasgow, Provan (Mr. Brown) rightly said that the Minister had better know what he was on about when the hon. Member for West Lothian has a campaign and a cause. There can be no doubt about that.
As I understand it, the matter arises under a Supplementary Estimate which the Manpower Services Commission asked for and to which my right hon. Friend the Secretary of State replied earlier in the year. The increase sought was for £22½ million, from £992 million to just over £1 billion. He said:
… £14·5 million is required by MSC to meet the operating costs of industrial training boards. As announced in my statement of 16 November 1981, the Exchequer will continue to fund operating costs until 31 March 1982, instead of 31 December 1981 as previously planned. A further £8 million is needed to meet winding-up costs of the ITBs."—[Official Report,  20 January 1982; Vol. 16, c. 127.]
The hon. Gentleman has referred to the increased efficiency of British firms. I could not agree more with his remark about the need for proper training to attain increased efficiency. The hon. Gentleman also referred to a chronic shortage of apprentices. I do not believe that to be entirely true. Where there are shortages of apprentices we are funding over industry as a whole, to the tune of over £50 million a year next year. There are 35, 000 first-year apprentices being so funded.

Mr. Dalyell: A headline in Transport Training,  the newspaper of the road transport industry training board, states:
Industry set for skill shortage in mid eighties.
This is a reputable document. Either the Minister is right or the document is right—one or the other?

Mr. Golding: rose—

Mr. Deputy Speaker: Order. Is the Minister prepared to give way to the hon. Gentleman?

Mr. Morrison: Of course, Mr. Deputy Speaker.

Mr. Golding: The Minister says that 35, 000 first-year apprentices are being funded. From what date has that been true?

Mr. Morrison: To my knowledge, although I shall obviously wish to check, it has been true for some months. I may have the figure marginally wrong, but I think I am correct in saying 35, 000 at a cost of over £50 million. If the hon. Gentleman, with his knowledge as Chairman of the Select Committee, is right, I say that I give the figure in good faith. I shall check and if I am wrong I shall inform all hon. Members who have participated in the debate of the exact figure. I think, nevertheless, that the figure that I have given is correct.

Mr. Dalyell: The Minister can perhaps clear up the matter by letter. If the road transport industry training board facts are inaccurate, hon. Members should be told.

Mr. Morrison: I can assure the hon. Gentleman that when he comes to see me shortly, I shall inform him exactly how many apprentices the Government are funding through the RTITB. I hope that this will enable the hon. Gentleman to see the importance that the Government attach to the funding of future apprenticeships in this industry.
There has been some misunderstanding about what is happening. The Government have not done to the RTITB what is proposed in respect of other industrial training boards. There has been no question of a proposal for the abolition of the RTITB whereas there have been proposals for the abolition of other industrial training boards. We have suggested that certain parts of the road transport industry training board should be removed from the scope of the training board. These are buses—that is to say, road passenger transport—warehousing, agricultural machinery, security transport and removers.
There have been thoughts about potential reorganisation within the road transport industry training board. We have proposed that possibly there should be a split within the board. We have not demanded or dictated, but proposed that there should possibly be that split. A review is presently considering whether there should be a split and I do not wish to prejudge or prejudice that review because I and the Government have no views on this aspect. An independent firm of accountants has been asked to consider the review to discover what costs would 'be involved if a split was made.
Of course, if one has a contracting board, such as the road transport industry training board, its members must consider whether or not its facilities are still right, proper and sensible for continuing training. I wholly agree with the hon. Members for West Lothian, Provan and Glasgow, Shettleston (Mr. Marshall) that there should continue to be training within the whole of the road transport industry. I would not otherwise occupy my present position. However, one must consider whether facilities are right or wrong. When I say that "one" must consider it, that does not mean me but the board. I must clearly state that the board is responsible for how it runs the training within its industry. That is why we have a statutory board in certain industries.
I am fearful of stepping out of order, Mr. Deputy Speaker, but I know that hon. Gentlemen feel strongly about the MOTEC. The proposition apparently discussed—I would not put it as high as a proposal—at a recent meeting of the board's finance and general purposes committee, was that it should consider how it runs its assets and so on. That is no more—as I understand it, not being a member of the board—than a perfectly


understandable review of the way it runs its assets. I also believe the matter was on the agenda and that there was no greater omission than that.
However, at the end of the day, I and the Government have no power to interfere with how the board runs its affairs. Hon. Gentlemen may feel that I should have power but I do not believe I should. I and the Government should be able to direct the right sort of training that should be carried out in given industries—in this case, the road transport industry. How and where the training is done should, of course, be up to them. That is the structure and nature of the constitutional relationship between myself, the Department of the Environment, the Manpower Services Commission and industrial training boards. If we did not have industrial training boards, we would be directly responsible. However, we do have them, they are statutory bodies and there is a certain amount of agreement on both sides of the House on that.
I must lay emphasis on the fact that any decision on the use of an asset which the MOTEC at Livingston is—

Mr. Deputy Speaker: Order. The hon. Gentleman knows that he must return to the Vote.

Mr. Morrison: I apologise, Mr. Deputy Speaker. The Government's money must be used in a way over which they have little or no control when one is talking about operating costs. I hope that that keeps the matter within order.

Mr. Dalyell: To help the Minister keep in order, one can point to the contrast of France, the Federal Republic of Germany and Japan and the fact that no other industrialised country on the face of the planet takes the same view of washing its hands of training requirements.

Mr. Morrison: I understand what the hon. Gentleman says. However, he is being less than fair when I am trying to be helpful to him. It is not true, when we will be spending more than £1 billion overall on training, to suggest that we are washing our hands of training. I am trying to explain the hon. Gentleman's predicament and to keep within the rules of order.

Mr. Golding: Will the Under-Secretary of State seek guidance on the figure that he gave me earlier? I have examined the MSC's corporate plan which talks about the intention in the coming year to provide 35, 000 places. Its plans for 1981–82, the current year, are to support 25, 000 young people. There is a gap of 10, 000 and the Under-Secretary of State should seek advice about the real figure. He will find that his brief is mistaken.

Mr. Morrison: I always defer to the hon. Member for Newcastle-under-Lyme because I know that he gets his

facts right, but I have given the answer several times. I believed that I was talking about the present position and not the past and if I gave the wrong impression I could not apologise more. I shall correct myself if I am wrong, but I believe that the figure is over £50 million for 35, 000 first-year apprenticehsips.

Mr. Golding: That is the intention of the Government and the MSC. I quarrel with the Minister because he said that there were at present 35, 000 places. He will find that it was intended to recruit 35, 000 youngsters next year and that the actual figure is that 50, 000 people have been trained during the past two years, which is an average of 25, 000 a year.

Mr. Morrison: I do not wish to argue with the hon. Gentleman. I believe that I talked about the present rather than the past position. If I misled the hon. Gentleman, I can only apologise to him. I believe that what I said was right, but we shall know tha position when we see Hansard tomorrow morning.

Mr. John Page: Perhaps I should have tried to interrupt my hon. Friend earlier in his speech, but I could not catch his eye. When discussing the Vote, which is not exclusively devoted to the road transport industry training board, will my hon. Friend bear in mind the boards that will not function in future? I believe that he has been most courteous in his discussions with the boards that are closing down. Will his officials or the MSC try to give a little more advance warning of the timetable for closure of some boards? I have in mind the ceramic and extractive industries training board.

Mr. Morrison: My hon. Friend has an important point. The uncertainty is difficult for everyone. I assure him and all hon. Members that I shall ensure that the MSC gives as early a warning as possible about the timetable.
The nub of the hon. Member for West Lothian's point is not as problematical as he says, because he is talking about the problems of a board that is not being wound up. The fact of the matter is that the garage sector of the RTITB at Livingstone does most of the training, and is to remain in operation.
At the end of the day, I have listened very carefully to what the hon. Gentleman had to say about training. I hope that he accepts it when I say that like him and his hon. Friends, I am committed to training. Their commitment was made obvious in their speeches. Because of the constitutional set-up between a Minister and the Department of Employment, the MSC and an industrial training board, there are certain decisions that belong to the industrial training board and there are certain decisions that are ours. We must not interfere too much, but I have heard what the hon. Gentleman has to say.

Orders of the Day — Unemployment

Mr. William Hamilton: I am glad to initiate the debate. In many respects it follows on from the previous one, and refers to the Manpower Services Commission Vote and the Supplementary Estimate. The debate is immediately concerned with the 3 million people who are on the dole. Last week in the Budget debate I referred to this matter and to the high costs of unemployment, some of which can be measured and some of which cannot. I mentioned then the document that is in the Library and to which I shall refer later in some detail, as I think that it is worth putting on record.
There are several ways of attempting to measure the total cost and the individual cost in money terms. There is the money that is lost to Government Departments, for instance, the taxes lost to the Exchequer, income tax, national insurance contributions, the indirect taxes that are not incurred by the unemployed and so on. On the other side, in terms of benefits paid out, there is unemployment benefit, sickness benefit, supplementary benefit, rent and rate rebates, administrative costs and so on.
The House of Commons research note No. 64 deals with these matters. It was published this month, so it is fairly up to date. No one would deny that the research department is an extremely reliable source of information for Members. I do not think that many hon. Members realise how powerful a weapon it can be if it is properly used. That document shows three separate estimates of the costs to the Exchequer of unemployment in 1981–82 that have been recently published.
First, there is the Treasury's estimated cost of an extra 100, 000 unemployed in 1981–82. That shows that in terms of taxes forgone and benefits paid the figure in round numbers was £500 million for every 100, 000. The MSC, on whose Vote this debate is hinged, had an estimate of £438 million.

The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): I apologise for interrupting, but the hon. Member referred to a Treasury estimate. Could he give his source for that, because that would be helpful to the House?

Mr. Hamilton: I quote direct from the research document. I gather that the Minister does not have the document. On page 1 it says that
Three separate sets of estimates of the Exchequer cost of unemployment in 1981–82 have been published recently (for full details and a discussion of the construction of each estimate see below).
Below we find Table I and the three estimates. There are three columns, one of which is for the Treasury, the second for the Manpower Services Commission, and the third for the Institute of Fiscal Studies. It goes on to describe in detail the figures that have been produced by the Treasury on this matter.
The Manpower Services Commission's estimate of the cost of an extra 100, 000 unemployed in 1981–82 was £438 million, and the Institute of Fiscal Studies' figure was £450 million. If one takes the median figure, it would not be outrageously inaccurate to say that about £450 million was the cost for each 100, 000 extra unemployed in 1981–82.
The February 1981 edition of the Treasury's economic progress report included an article on costing unemployment. On 18 February 1982, The Times reported that an

updated version of the economic progress report figures had been prepared, but that the Government had decided not to publish it. I challenge the Government to publish it. What are they hiding? If they produced the earlier report, why do they not produce this one? We have a right to know the figures.
The 1982 estimate is reported to show—we can only surmise, in view of the Government's reluctance to publish—that in 1981–82 an extra 100, 000 unemployed would cost £500 per person, or £500 million in tonal, compared with £340 million in total or £340 per person in the previous year.

Mr. Bruce-Gardyne: I apologise for interrupting the hon. Gentleman again, but I am somewhat worried by what he said earlier. I have not seen the report from the House of Commons research department. The hon. Gentleman said that it had attributed this estimate specifically to the Treasury. It had no right to do that. It was quoting, as the hon. Gentleman has now made clear, a report in The Times, which I shall be happy to answer. If the research department of the House of Commons is attributing that estimate specifically to the Treasury, as opposed to a report in The Times, I can only say that the House of Commons research department is acting without proper authority in so doing.

Mr. Hamilton: I do not know whether the Minister is trying to confuse me or the House. The document is clear, and I trust the House of Commons Library with my lire. I believe that the document is absolutely accurate, when it specifically says that the February 1981 edition of the Treasury's economic progress report included this article, on which its figures are based. The figures in the first column attributed to the Treasury are directly related to the original document. The figures in The Times are the surmised figures that have been deduced from the report that has not been published but which is available in the Treasury. I am saying that that document should be published.

Mr. Andrew F. Bennett: It is crazy when a Treasury Minister intervenes to question my hon. Friend's figures. Surely the Minister should tell my hon. Friend what the Treasury figure is.

Mr. Hamilton: I hope that we shall be given the Treasury figures before the debate is concluded. The first figures that the Library document quotes are Treasury figures. I have said that the second set of figures are surmised by The Times. I want a denial or confirmation of those figures. The Treasury figures must be with the officials. The Treasury have the economic progress report, but the Government have refused to publish it.
The House of Commons Library makes it clear that £500 million, which is the cost of an extra 100, 000 on the dole, cannot be multiplied by 30 to arrive at the cost of 3 million on the dole. I shall not weary the House with all the reasons that the Library set out in the paper. Despite all those difficulties, the Manpower Services Commission, which we are discussing—

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. We are not discussing the Manpower Services Commission. We should be discussing supplementary benefits. This is a Vote on the Department of Health and Social Security.

Mr. Hamilton: Yes, Mr. Deputy Speaker. The original Estimate is £734 million and the new Estimate is £848 million, which is a Supplementary Estimate of £22·6 million. Presumably the MSC has spent some of that money on producing, or is about to do so, the figures that I am about to give to the House.

Mr. Deputy Speaker: Order. We are dealing with Class XII, Vote 2, on page 114. That is the subject of the debate.

Mr. Golding: We are dealing with an extra expenditure of £420 million. We know that the bulk of that sum is to provide supplementary benefit for those who are unemployed. The burden of the argument is that the Government have spent an additional £420 million in supplementary benefit alone to sustain the high level of unemployment.

Mr. Hamilton: I am obliged to my hon. Friend. I confess that I was in some difficulty. I am anxious not to get out of order. You know me well enough to know that, Mr. Deputy Speaker. However, I hope that I shall not be inhibited from putting on the record the case that I want to present. I shall try as best I can to keep strictly within order as defined by the Estimate to which my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has referred.
Despite all the difficulties, the MSC was quoted by the Financial Times on 9 November 1981 as saying that the cost of unemployment this year would be £12·45 billion. That would include the supplementary benefit to which we are referring. In November 1981 unemployment stood at 2·84 million and it is now much higher than that.
The third investigation into this issue was made by the Institute of Fiscal Studies. In the November 1981 issue of its journal an article was published on the Exchequer costs of unemployment, which include the supplementary benefits in the Vote. It arrived at a figure startlingly similar to that produced by the MSC. It estimated the overall cost to be £12·947 billion.
A large number of those 3 million people are living on supplementary benefit and, by definition, are on the poverty line. Their families, friends and relations are indirectly affected. Therefore, the actual number affected could be 10 million, 12 million, 15 million—who knows!
Circumstances vary widely. Some of those people will not be on supplementary benefit. They will probably have savings, or relatives to help them out. Circumstances also vary as to the size and age of families as well as their entitlements to various benefits such as supplementary benefit, rate and rent rebates, free school meals, welfare milk and so on.
Table II on page 13 of the House of Commons document shows that at December 1979, the total cost to the Government of a married couple on average earnings with two children was in the region of £6, 000 a year.
None of those figures, nor any of the figures we are discussing in this Vote, takes account of the wealth lost through those people being on the unemployment roll. Unemployed building workers could build houses, schools and hospitals. Others could produce coal, steel and textiles. Such things are not produced because workers are not given the opportunity to produce that wealth. Nor can we measure the misery and ill-heath caused by the indignity of being on the dole.
You referred, Mr. Deputy Speaker, to the fact that we are discussing supplementary benefit. Any hon. Member who regularly holds his surgery and visits his constituents must be appalled by the poverty induced by unemployment and the appalling misery endured by anyone who attempts to eke out an existence on supplementary benefit allowances.
The impression is created by some hon. Members that somehow money is easily come by in the DHSS. Anyone who has tried to get money from the DHSS will know that that is not true. One does not easily get money from any Government Department.
It is self-evident to many of us that much ill-health is caused by unemployment, especially to those on supplementary benefit who are the worst off. I have with me a cutting from The Scotsman,  dated 6 November 1981. It refers specifically to these matters, and there is increasing evidence in support of what I have said about health. Perhaps the DHSS and its Scottish equivalent will produce the basic health statistics of the unemployed and those on supplementary benefit compared with others in full employment.
I have certain figures with me that I should like to put on record. There is increasing evidence that the recession and unemployment can cause death. I can quote an actual case that came to my notice about 12 months ago. The husband of a friend of mine suddenly lost his job. He was not old—only in his fifties—but within 12 months he had died of a heart attack. One does not know whether that was directly due to his being unemployed, but it could not have helped.
According to The Scotsman article some time ago, Professor Harvey Brenner of the John Hopkins university, Baltimore, gathered statistical evidence in the United States which seemed to suggest
that when an industrialised society accumulates a million job losses over a five-year period the corresponding health cost is 217, 000 deaths and 63, 000 admissions to psychiatric hospitals.
A report published early in 1981 showed that Professor Brenner's results were equally valid for England and Wales.
It stands to reason that the loss of job, career and status can lead to
stress-related problems such as blood pressure and heart disease.
The example which I cited from Newcastle upon Tyne is a case in point.
The article continues that in Scotland
the harsher climate, and the traditional diet and drinking habits
make the health implications of unemployment much more severe than they might be south of the Border.
Dr. Leonard Fagin of Claybury hospital, Essex, is reported in that article as saying:
The spate of suicides and riots in unemployment-stricken towns had recently brought to the public's attention a feature of joblessness which had not figures in the minds of those that thought it would only have financial and probably minor social consequences.
Dr. Fagin makes the point that
all members of a family can be affected by the job loss of the breadwinner.
That is common knowledge to those of us who move among such people. Dr. Fagin also said:
disabled people who lose their jobs tend to show serious and rapid decline"—
of morale, health, and the rest.
Pressure has been brought to bear on the Home Secretary from inside and outside the House to use more


violent methods of dealing with the increased crime and vandalism which appear to be coming onto our streets and into the open. We do not know how far vandalism and crime are the direct result of enforced idleness, with the bitterness, hopelessness and anger which that engenders. The answer is not to "hang 'em and flog 'em" but to put them to work. That is the more sensible and humane answer.
The Government are deliberately hiding from public gaze as much information on these matters as they can. The facts are too embarrassing to be revealed so the public are kept in the dark. The brutal, fearful truth is that the figures which I have quoted will become much worse in the next two years, and probably for even longer, unless there are radical changes in the Government's policies. There are no signs of that yet. Time is running out. The problems are becoming intolerable—certainly for the people who have to bear them and for those of us who have to watch them.

Mr. John Golding: When I heard of this Supplementary Estimate of £420 million for supplementary benefit, I was deeply shocked.
One reason why I wish to speak in the debate is that I had hoped that it would be possible for the Select Committee on Employment to look at this additional outgoing, but it is a Vote which is proper to the Department of Health and Social Security and therefore to the Select Committee on Social Services.
I have taken an interest in supplementary benefit ever since I presented my first case at a tribunal more than 30 years ago—for my own mother. Since then, I have come to understand much of the feeling of people who are forced to draw supplementary benefit and who often—quite wrongly—feel that they lose dignity thereby.
As a young officer at the Ministry of National Insurance back in 1948, 1949 and 1950, I became able to put an age to people according to whether they referred to national assistance, as it then was, as "national assistance", "the parish" or "the poor law". One could date them by the way in which they described what is now known as supplementary benefit.
It is tragic that the Government have to ask for an additional £420 million. My guess is that most of it is due to the massive increase in unemployment, particularly long-term unemployment. Some of it may be attributed to the necessity to increase supplementary benefit for pensioners with fuel allowances and the like, but I assume that most of it is to support the unemployed.
I regret the necessity for that additional amount, first, because I believe that in this day and age it is wrong for unemployment benefit to be a short-term benefit. In previous decades, it was reasonable to regard it as a short-term benefit, restricted to 12 months, rather than as a long-term benefit such as a pension or invalidity allowance. it is quite wrong, however, to regard unemployment as short term when the Manpower Services Commission estimates that there will be 1 million long-term unemployed in 1982. Even if we confine ourselves to the period to which the Supplementary Estimate relates, the MSC has said that, in the 12 months to October 1981, the number of people out of work for more than a year doubled to 747, 000. We are therefore thinking in terms of between 750, 000 and 1

million long-term unemployed. In those circumstances, it is quite wrong to consider unemployment benefit as a short-term benefit.
There is no justification whatever for reducing the incomes of those who are forced to be unemployed, as millions now are, after 12 months. Certainly there is no justification for taking away a benefit which they regard as a right and which they have earned by paying contributions and putting them on supplementary benefit about which they often have very different feelings. I deplore the need for this additional £420 million because those moneys could have been spent more profitably for the Government, for the country, and, most important of all, for the unemployed, by ensuring that they received work experience or training after they had been unemployed for 12 months.
I cannot accept a society in which people are unemployed for such long periods. It is miserable enough to be unemployed for one, two, or three months. One has only to see the insecurity that that can produce in proud people to know that we must avoid it if possible. All research has shown that there is a tremendous demoralisation as the period of unemployment increases. There is a collapse of morale within the individual, and, unfortunately, a lessening of the employers' propensity to recruit people the longer that they have been unemployed.
Long-term unemployment is a total tragedy. l agree with my hon. Friend the Member for Fife, Central (Mr. Hamilton) that it is a tragedy not only for the individual but for the whole family. Long-term unemployment is a great curse.
Let me remind the House that we are now talking about a problem which, according to the Manpower Services Commission, will affect 1 million of our fellow citizens this year. It is no small problem. It is not a marginal problem. Long-term unemployment, together with youth unemployment, is one of the central social problems facing the House and the Government. Because of that, more attention should be paid to providing training and work experience for the long-term unemployed to restore their morale and confidence rather than the payment of supplementary benefit.
The Select Committee on Employment is diverse. It is an all-party Committee. Its members have differing political philosophies and views, one from another. However, it was the unanimous view of the Select Committee, on reading the corporate plan of the MSC and hearing the evidence given by its Chairman, that attention should once again be drawn to the level of provision for the long-term unemployed.
Bearing in mind the considerations that I have already outlined, the third report of the Select Committee stated that:
providing training and work experience for the long-term unemployed should be a principal objective of the MSC 
Although I deplore the increase in unemployment, I should have been far happier if the Minister had asked for a Supplementary Estimate for increased provision on the MSC budget for the long-term unemployed rather than ask, as he has done, for the £420 million for supplementary benefit.
It is an important and valid point that a substantial proportion of that £420 million could have been avoided if provision had been made in other ways for the long-tern unemployed. That is why the Select Committee unanimously decided to recommend to the Secretary of


State that the Manpower Services Commission's request be met, that provision for the community enterprise programme in 1982–83 should be 60, 000 filled places instead of the 30, 000 provided by the Secretary of State.
The Government cannot rely merely on the payment of supplementary benefit to alleviate the plight of the long-term unemployed. There must be a better way. Supplementary benefit keeps individuals and families at a low economic level, and at an even lower psychological level. The Government do not realise the bitterness being created in our society because people are being forced to live on such benefits. During the past two or three years there has been a tremendous transformation in public thinking. At previous elections, Labour Members have been charged with encouraging layabouts and with encouraging people to live on social security. That charge is not heard today, because throughout the council estates and working class areas, generally, people have come to realise that they have not brought unemployment on themselves. It is far beyond their ability to cure it. Unemployment has been caused by a multiplicity of economic factors.
It is just not good enough for the Government to rely on the payment of supplementary benefit. They must act quickly not only to reduce the number of people unemployed and to minimise the impact of unemployment on our youth, but also tackle a major problem behind that figure, long-term adult unemployment. Until they act, we shall waste money while sitting back, washing our hands of the greatest social evil of our age.

Mr. Bob Cryer: We are dealing with an additional expenditure on supplementary benefit of £420 million, under Class XII, Vote 2. However, nationally, the cost of unemployment is much higher. The additional expenditure that we are dealing with is due entirely to the Government's policies, which have caused the present tremendously high level of unemployment.
My hon. Friend the Member for Fife, Central (Mr. Hamilton) mentioned the Library research note, which points out that the total cost for 1981–82—assuming an average of 2·84 million unemployed—in £12, 477, 000, 000. That is made up of direct payments of unemployment benefit of £2, 004, 000, 000, supplementary benefit of £2 billion, loss of income tax of £4, 257, 000, 000, loss of national insurance contributions of £3, 280, 000, 000 and loss of indirect taxes, including VAT, at just under £1 billion, at £906, 000, 000. That is a massive cost. Of course, it is due directly to the Government's policies that we are dealing with this tonight. The great pity is that the Government are having to come for money to pay supplementary benefit because of their policies.
The cost is not simply in increased supplementary benefit payments. It is longer term. The reason for the payment of the supplementary benefit arises out of the sharp and savage decline in our manufacturing industry base. For example, the current issue of Economic Trends published by West Yorkshire metropolitan county council for February points out that the statistics are frightening, with the rapid erosion of the county's manufacturing

employment base from 330, 000 in June 1979 to an estimated 265, 000 in June 1981, a loss of one in five manufacturing jobs.
No wonder the Government have to come to the House for extra money for supplementary benefit payments. To quote a few examples of the industries that are so badly affected in West Yorkshire that they are in a difficult position to recover—

Mr. Deputy Speaker: Order. That would be going rather wide of this debate. It must be concerned with supplementary benefit. It has nothing to do' with the industries that have been affected.

Mr. Cryer: These payments are made not to Martians but to people in the form of supplementary benefit. At one time, before we had this rotten Government, these people worked in the chemical and allied products industry, in metal manufacturing, in engineering and in textiles and clothing.
The whole point of debating the issue is to see why the payment of the supplementary benefit is necessary. It is important to go just a little wider to point out that not only are we dealing with £420 million but that if something is not done, as my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, the supplementary benefit payments are going to get not smaller but bigger. The Government do not have any policy to deal with this problem. They express sorrow and sympathy, yet day after day they go to the Dispatch Box and announce policies which put more people on the dole and more people in the supplementary benefit queue, and they know it.
In passing, there has been a decline of 15·1 per cent. in chemicals and allied products, of 32·4 per cent. in metal manufacture, of 21·3 per cent. in engineering and of 32·2 per cent. in textiles and clothing. There has been a loss of 39, 000 jobs in the county's textile and clothing industries. That is why we are talking about supplementary benefit.
When a man or a woman has been unemployed for 12 months, unemployment benefit ceases and the person goes on to supplementary benefit. Manufacturing is the kernel of our development as a nation and the loss of jobs in the manufacturing and other sectors is crucial in regard to supplementary benefit.
The Government are in a vortex. They are cutting back on public expenditure, which is curbing jobs in both the public and private sectors, which in turn is causing them to pay larger sums in unemployment benefit and, of course, the concomitant supplementary benefit.
I should like to quote my constituency in passing, as an explanation. Between 1976 and 1979 there were a number of offers of regional selective assistance. The Government do not like that sort of public expenditure, so they are cutting back on Keighley as an intermediate area. Those offers created—according to Govenrment figures in answer to a question of mine on 2 March—

Mr. Deputy Speaker: Order. The hon. Gentleman is going miles wide of the debate, which has nothing to do with that subject.

Mr. Cryer: We are talking about £440 million, Mr. Deputy Speaker. If that money had been spent differently—for example, on regenerating manufacturing industry—we should not be talking about supplementary benefit tonight.

Mr. Deputy Speaker: Order. That is as may be, but in this debate we are dealing with supplementary benefits. We cannot go wider than that.

Mr. Cryer: What I was saying, Mr. Deputy Speaker, was that between 1976 and 1979 regional expenditure in Keighley created 628 jobs. Those people in jobs would not require supplementary benefit. The Goverment are cutting back on that sort of regional expenditure, so they will face more expenditure of the sort that we are discussing. Between 1980 and 1981 they paid only modest sums, which created 139 jobs through regional selective assistance. It is much more important to create proper jobs than to keep propping things up with supplementary benefit as the Govenrment are doing.
I want to speak specifically about the cost in loss of dignity when people obtain supplementary benefit. When they go off unemployment benefit and on to supplementary benefit they must have a form from the employment office, which they take to the supplementary benefit office. Sometimes they are not given the correct form, so that at the Department of Health and Social Security office they are told that they must return to the employment office, which will sometimes tell them "We don't backdate the forms which you need in order to qualify for supplementary benefit at the DHSS office". In other words, the receipt of supplementary benefit is not always the easy matter that people sometimes describe or imagine.
When people are on supplementary benefit they would much prefer to be needed members of society, playing what they consider to be an important part in society. People's importance in society is recognised in a significant way by providing them with jobs. When they do not have work and are on supplementary benefit they also feel rejected.
What is worse is when the DHSS starts sending out letters to people on supplementary benefit, who are among the recipients of the sum that we are discussing. In Keighley there are 4, 000 people chasing about 80 jobs. One of my constituents produced to me a letter from the DHSS office at Worth House, Worth Way, Keighley, which said:
Dear Sir or Madam, 
—it was duplicated, of course—
We are concerned, as no doubt you are, about your continuing unemployment, and I should like to see you to discuss any difficulties you are having in finding work and whether we can help you in any way. Would you therefore call at the above address on"
—then it gives the date and time.
When you arrive please show this letter to the receptionist. If you have started work in the meantime please let me know on the enclosed form. Then there will be no need to keep the appointment.
People feel rejected, and they go round in increasing desperation looking for jobs. They can tell stories about applying for 20, 30, 40, 50, 60 or 70 jobs. I have a constituent who has written after more than 60. He is not unique. Because they are in receipt of supplementary benefit they get a form from the DHSS which says
We are concerned … about your continuing unemployment".
It is a grotesque parody as if they have to scrutinise that massive portion of humanity because they somehow feel that there might be some dubiety about their obtaining supplementary benefit. There simply is no alternative; people are driven on to supplementary benefit by the Government's policy.
I wrote to the DHSS about this and received a helpful reply from the local manager. It says:
Although the letters are prepared and issued locally, the wording is based on a national draft instruction as to the letters' content.
It is a draft instruction that the DHSS is to harass those people who are already facing significant difficulties. The difficulty faced by people on supplementary benefit is illustrated in the annual report of the Electricity Consumers' Council for 1981. It shows that disconnections increased from 90, 936 in September, 1977 to 112, 071 in the year ended September 1981.
I do not want to criticise in any way the amount of money for supplementary benefit that we are arguing about. I want to see it increased. People often have difficulty in obtaining an adequate and proper amount of supplementary benefit. They are scrutinised extremely carefully by the officers of the DHSS.
I want to exempt my local DHSS office from any criticism arising from the letter I have described, because it is quite clear that they are acting on a national instruction. They probably do not want to exercise that sort of scrutiny because they recognise the sense of outrage felt by people who receive that letter.

Mr. Golding: Does my hon. Friend agree that it would be better to end the payment of supplementary benefit to those who are unemployed and to continue to pay them unemployment benefit after the 12 months is up?

Mr. Cryer: I entirely share the view of my hon. Friend the Member for Newcastle-upon-Lyme that unemployment is clearly a longer-term matter and the arbitrary cut off of 12 months' unemployment benefit was decided when it was easier to obtain a job. That clearly is not the case now and until we get a change of Government those circumstances are not likely to return. It would be far preferable for people to remain on unemployment benefit than to switch to supplementary benefit. It would help the many people who are perturbed to find that they are handed the wrong form and have to move between the Department of Employment and DHSS offices in order to have the matter sorted out.
I want to comment on the social cost of unemployment which is represented by supplementary benefit payments. There has been greater crime, and I have no doubt, as my hon. Friends have mentioned, that there will be a welling-up of feeling on the Government Benches for hanging, flogging, pulling toe nails out or anything onto which they can grip for an instant solution, when there simply is none.
Chief constables have been calling for firmer action. Earlier in today's proceedings, the Prime Minister denied any connection in the increased level of unemployment and the deprivation that people face, the very low levels of supplementary benefit payments on which people find it is a struggle to live, and the increased electricity, gas and water charges, all by virtue of Government direction and policy. The social consequences are that crime is likely to increase and that it is likely that there will be rioting on the streets.
One of the dangers of a large number of unemployed is that society can shift in a rightward direction such that people on the Right of the Conservative Party and beyond who pose instant solutions such as more prison sentences, and more dictatorial powers from the centre, will find support. What is needed from the Government is a change of policy. Payments of supplementary benefit should be


reduced not by the cut in benefits that the Government are intent on producing but by putting more people back to work. That is the policy needed to ensure that the House does not have to vote such large sums for supplementary benefit.
People should be provided with what the Government implied would happen in 1979 through their Saatchi & Saatchi posters and their statements. The Government stated that they would provide proper jobs for people. They dismissed Labour's job creation schemes as providing trick jobs. Now the Government depend more than ever on job creation schemes and supplementary benefit payments.
The Opposition want to see policies introduced that will provide proper jobs in manufacturing and service industries. This is the only course to follow if the country is to recover its economic prosperity. We cannot rely on the Government to fulfil that aim. We shall work together for the election of a Labour Government that will carry out the alternative economic strategy set out by the leadership of the party and the parliamentary party at the beginning of this week.

Mr. Andrew F. Bennett: I join in extending congratulations to my hon. Friend the Member for Fife, Central (Mr. Hamilton) on initiating this debate on the cost of unemployment. It is an important topic that should occupy much more of the time of the House than it does. I appreciate that in submitting his request for a debate on the Consolidated Fund (No. 2) Bill my hon. Friend had to ensure that the cost of unemployment was tied to one of the Vote headings, but it could, I believe, have been tied to about a dozen. I find puzzling the procedure that means the subject has to be tied to one heading.
It has been shown that the extra expense of supplementary benefits has triggered off a number of other costs. What is the total direct cost to the Government of the present level of unemployment? The Minister intervened during the speech of my hon. Friend the Member for Fife, Central to challenge some of his figures. The simple answer is for the Minister to say what the Treasury believes is the figure.
Hon. Members also wish to explore the composition of those drawing supplementary benefit. Are they people who have been out of work for a short or long period? What are the implications for future expenditure, and where should we apply most of our efforts to get people back into work? Should that be given to those out of work for a short or long time?
We must then ask how far this expenditure has triggered off extra costs to the Health Service, family distress, breakdowns and other costs, particularly to the personal social services. I also want to ask how far the fact that these people have been out of work and have had to draw benefits means that they have lost opportunities to gain new skills. People gain new skills in Britain from being in work. By carrying out jobs they learn new methods. I also want to ask questions about that aspect.
I go on to ask about the cost to the community in general and whether it was not a misuse of resources to pay people supplementary benefit, when they could have been doing much more useful work for the community. I finally

ask, because they have had to draw benefit, how far some of them have been provoked into crime. I certainly felt that the Prime Minister's words in the House this afternoon were profoundly depressing. I want to explore that aspect.
What is the full direct cost? It has been suggested that the total cost of unemployment is £14 billion. My Library brief states that there are problems if one tots up the cost—the estimates are provided by the Treasury—of an extra 100, 000 unemployed and merely multiplies that figure by the total number of unemployed. When the Minister replies, perhaps he can tell us what is the real cost of unemployment. I wonder whether he will go further and tell us what is the cost for an individual or an average family. His right hon. Friends have been pressed on several occasions, particularly during Treasury Questions, to tell the House what is the full cost of an unemployed individual.

Mr. Deputy Speaker: Order. If the Minister were to accede to that request he would be out of order, because we are not dealing with that in this debate. We must stick to the Supplementary Estimates that are the subject of the debate.

Mr. Bennett: As a result of spending this sum on supplementary benefit, what is the full cost to the Government? I thought that we were entitled to ask what cost had been triggered off by this sum. Many of these items are included in the Supplementary Estimates. The Minister would not be out of order if he answered this basic question: what is the full cost of someone being unemployed?
The Minister has said on many occasions that it is impossible for the Treasury to provide such a figure. It seems that the Treasury is very reluctant to provide it and it is amazing that the House of Commons Library can give an estimate of it. It takes as an example someone who first became unemployed in December 1979—a married man with two children—and gives his full cost to the Government as about £6, 006. Probably £346 would be the cost and supplementary benefit, income tax rebate £194, rent and rates £223, free school meals and welfare milk £114, unemployment benefit £2, 080—perhaps on the benefit side of the question—and, as lost revenue to the Government—a national insurance contribution of £1, 321, indirect tax £400 and income tax £1, 328. That gives a total of £6, 006.
I wish to know whether, as a result of that extra cost, we shall trigger off all those implications for the Government with the other benefits having to be paid out and the lost income. The question that the country wishes to have answered is: what is the full cost of unemployment? What are the results of what sounds like a relatively small amount being paid out in supplementary benefit?
If we are really talking about each unemployed individual drawing benefits, partly made up by supplementary benefit, of about £6, 000, why cannot we find more useful ways of employing that person? I could find many constituents who would be pleased to accept a wage of about £6, 000 and who would then be doing something much more useful than they are at the moment. For example, play leaders would not need much training. The number of people who are allowed to enter universities and colleges is being cut by the Government, and yet for much less than it costs to keep someone who


is out of work and married, with two children, one could be paying a student grant and the full university costs. That is clearly an area in which the money could be better spent.
Many more people could be employed in the hospitals in Stockport. With the deplorably low wages in hospitals, many people could be employed for the same amount as the Government are now paying out in benefits. Tragically, the home help service is being cut by the Government. Instead of having asked for extra money for supplementary benefit, the Government should have put into the Supplementary Estimates an extra sum to employ more people as home helps.
I could go on to make the point again and again. I do not wish to go much further with it, but I stress to the Government that, in their figures for the full cost of unemployment—not just the item that is before us tonight—the alternative employment of those people rather than the paying out of benefit would be extremely important.
A most depressing aspect of the increase in unemployment is not just that far more people are unemployed, but that many more people have been unemployed for a long time. Nearly 1 million people will have been out of work for 12 months. It is depressing to be out of work for a week or a fortnight, but when one gets to the point where one has been struggling to find work for 12 months it beomes appalling. But if, added to that, one does not have enough money, so that one is struggling all the time, the position becomes intolerable to many individuals.
That is the appalling aspect of the present benefit system. My hon. Friend the Member for Keighley (Mr. Cryer) suggested that the present benefit system was designed when people were normally out of work for a short time. Let us consider supplementary benefit. There is a short-term rate and a long-term rate. The short-term rate is based on the assumption that someone will be on it for a short time. One goes on to that rate having some reserves of household equipment and clothing, and needing only a sum of money to tide one over until a decent income can once again be earned.
The long-term rate assumes that the store of clothes and household equipment will start to run out and must be replaced. People must remain on the short-term rate for 12 months, and then they go on to the long-term rate, except those who are unemployed. Those people will be condemned to stay on the short-term rate for ever. They will be assumed never to need to replace clothing household items. That is appalling. If there is a floor level, a basic level at which people need to survive, with a short-term and a long-term benefit, we cannot say at the same time to one group of people, the unemployed, that they will never be allowed to get from the shot-term to the long-term rate. In other words, they will always be condemned to receive less from the State than the State recognises that they need if they are to be on benefits for a long time.
The Estimates should have had a bigger sum to ensure that people who have been on benefits for about six months could move from the short-term to the long-term rate.

Mr. Golding: Some of these points were made by my hon. Friend the Member for Keighley (Mr. Cryer). Would it not be better for this Estimate not to be there but for the unemployed to continue to be paid unemployment benefit?

It is not good enough to argue for more supplementary benefit. It is better to argue for more unemployment benefit.

Mr. Bennett: Unfortunately, the whole system of unemployment and supplementary benefits is complicated. I am sure that my hon. Friend is aware that many are drawing unemployment benefit who have to have a top-up from supplementary benefit to have the minimum that they require. The most important thing is to guarantee that people receive the money that they would be entitled to on the long-term supplementary benefit but cease to means-test it and simply say that that is the unemployment benefit. It should be paid to that individual as of right. It should be fixed at the present level of the long-term supplementary benefit. I accept that we must try to do something about this.
What is now the composition of the amount of money in the Supplementary Estimate? How much of it is made up from those who are drawing unemployment benefit, with a topping-up supplementary benefit, and how much of it is a purely supplementary benefit? In other words, how much is being paid to those whose unemployment benefit has run out and have to rely entirely on supplementary benefit?
The Government have to look at the measures that they are taking to ensure that those out of jobs for 12 months have at least an equal chance of getting employment as those out of work for a short time. I am told repeatedly by constituents who have gone after job after job that it becomes less and less likely that they will get a job the longer they are out of work. They find that the jobs go to those out of work for a short time.
Unfortunately, employers give preference to those who have worked last week or last month, rather than to someone who has not worked for 12 months. The Government must start thinking of ways by which they can discriminate in favour of ensuring jobs for those who have been out of work for a long time. Those are the ones who need the work, for their dignity and self-respect. It is extremely difficult to face up to applying for 80 or 90 jobs and to be turned down every time. These people have to apply for benefits and are often hauled in before a benefit officer and asked whether they are really trying.
I had a constituent who threw at me about 15 letters refusing him a job, because he wanted to express his bitterness. He was struggling to find a job but was being called in by a benefit officer and questioned on whether he was really making an effort. What will the Government do for those who have been out of work for 12 months, very nearly 1 million of them? What will they do for those who have been out of work for 18 months or two years, of whom there are almost a quarter of a million? Those are the people who need help from the Government.
How far do the costs of unemployment trigger off costs for the Health Service? It is difficult to show the effect that unemployment has on people's health. It is suggested that when people are out of work there is a decline in morale, which affects their health, and they are therefore more prone to illness. There is also evidence that higher unemployment has reduced sickness, because people in poor health seem to be those who lose their jobs first. Thus, the Government pay less sickness benefit. I hope that the Minister will tell us the true cost of unemployment to the Health Service.
What are the implications for pensions? Many of the people between the ages of 55 and 65 who are now out of work not only have to draw supplementary benefit now, but are denied the opportunity to have a decent income in old age. First, they cannot save on their supplementary benefit, although most people between the ages of 55 and 65 save for their old age. They may not want to put money in the bank, but they may want to buy household equipment, get the house decorated, and so on. They cannot do that in preparation for retirement.
Secondly, such people cannot contribute to the new earnings-related scheme for retirement pensioners. So not only do those people have to survive on supplementary benefit between the ages of 55 and 65 before drawing their pensions, but their pensions will be much lower than those of people who have been working and contributing to the new earnings-related scheme, and thus drawing pensions based on their earnings at retirement. The Governmnt should consider the implications for retired people.
Moreover, it is not just a matter of the pensions that those people will get when they retire at 65, because those pensions will stay with them for the rest of their lives. Thus, the pension rights of people who are out of work in the last four or five years of their working lives are affected for many years to come.
There are many other aspects that I could mention. I am concerned, for instance, about the strain on the family that is created by people who have to live on benefits. I wonder whether the Minister could get through a month on the amount that he would receive in benefits, without finding that it was harder to be polite to people and to prevent conflict and strain in a household. My constituents tell me about the matrimonial disputes that have resulted from the lack of income and the tensions that result from the loss of dignity at not having a job. The costs are considerable.
At the beginning of my speech I mentioned the loss of skills. For most people in work there is a constant process of learning new skills. It is particularly sad that people who are unemployed for long periods are out of the work environment and thus cannot learn new skills. New techniques and methods are regularly introduced in factories in my constituency, and people in work learn them. Even if they do not directly work on the new machinery, they pick up information about it. People out of work for long periods find that industry is passing them by, and when they apply for a job and are asked aout new techniques they know nothing about them.
The community loses because benefits have to be paid from everyone's taxes. There are other costs to local communities. For example, there is a great deal of difference between a shopkeeper who has in the area around his shop people who are in work and have reasonable levels of income and a shopkeeper who has around his shop people on benefits. In many instances that may make a difference between whether or not a local corner shop is viable. There is certainly a rapid knock-on effect for individual shopkeepers.
The Minister may be able to tell us what are the costs to the community in terms of loss of trade and loss of business of having people who are unemployed. There are many throughout the country who provide services to local communities who are concerned at the loss of income that

they have suffered as they have found that more and more of their potential customers are on benefits rather than on earned income.
The community loses by paying out supplementary benefit and the other costs of unemployment rather than employing people. If only some of those who are out of work from the building industry, for example, could be put into work, they would have the opportunity to create additional housing stock for the local community, which would be of considerable value in the immediate present and well into the future.
As for the costs of crime—

Mr. Deputy Speaker: Order. We must stick to supplementary benefit and not discuss crime.

Mr. Bennett: It is difficult for someone who has been in receipt of supplementary benefit for a long time to put up with the continual pressures of the consumer society. They are told night after night as they watch their television that they should be greedy and that if they are successful persons they should be enjoying foreign holidays and many consumer goods.

Mr. Golding: Within the Supplementary Estimate there are sums for the payment of supplementary benefit to the families of convicted persons who are in prison. Therefore, the increase in the crime rate must relate to the Supplementary Estimate.

Mr. Cryer: That is right.

Mr. Bennett: I contend that it is extremely difficult for those who are living on minimum benefit levels to put up with the almost continual barrage of advertising from the consumer society that suggest that they should enjoy various consumer items. The vast majority avoid the temptation of crime, but it is not surprising that one or two find themselves firmly caught between what the Government are prepared to let them have in benefits and what the Government insist they watch by way of propaganda, thereby raising their expectations. It does not seem surprising that we have seen a rise in the crime rate. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has suggested, the result of some convictions is extra supplementary benefit costs.
My hon. Friends are suggesting that the Government should produce a balance sheet that shows the cost of unemployment. It should tell us what is being paid out in supplementary benefit and what that is triggering off in other costs. If the Government gave the House and the country the true cost of one person being unemployed, there would be a clear realisation in the House and the country that the money could be far better spent on employing that person, giving him dignity and allowing him to make a major contribution to the community.
I challenge the Minister, either now or in the next week or so, to find a way of telling the House the full cost of unemployment and the implicatons for all the services that the Government provide. From that base we could move on to getting the Government committed to full employment and not to increasing the number who have to suffer the indignity of unemployment.

The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): We have had a wide-ranging debate, and I shall do my best to answer the points raised without


running into too much trouble with you, Mr. Deputy Speaker. I fear that on some of the points this may be a matter of some complexity, but I shall do my best.
The main subject of the debate, properly raised by the hon. Member for Fife, Central (Mr. Hamilton), was the cost of unemployment. I intend to deal with that part of the debate in a moment, but first I shall try to deal briefly with some of the issues that arose on the way.
I do not thing that it advances the purposes of debate in this House for the hon. Member for Keighley (Mr. Cryer) to repeat once again that the level of unemployment and the Supplementary Estimate before us tonight in respect of supplementary benefit are a direct result of the Government's policies. On that basis, the 40 per cent. increase in the average level of unemployment that occurred under the Labour Government between 1964 and 1970 and the supplementary benefits that resulted therefrom were the responsibility of that Government. Equally, the 40 per cent. further increase in unemployment that occurred under the succeeding Government from 1970 to 1974 was their responsibility, and the 70 per cent. unemployment increase that occurred between 1974 and 1979 was the responsibility of the Government of which the hon. Gentleman was a member.

Mr. Andrew F. Bennett: rose—

Mr. Bruce-Gardyne: Perhaps the hon. Gentleman will allow me to advance further into my argument. If need be, I shall give way to him in due course. It is not helpful to debate in this House to advance the sort of nonsense mentioned by the hon. Member for Keighley.

Mr. Cryer: I accept that the level of unemployment was too high under the Labour Government. The Minister may recall that I resigned when the Labour Government refused to support a workers' co-operative that was due to close, putting 700 people on the dole. Of course, that Labour Government were starting to reduce unemployment. My point is that during the 1979 general election the Conservative Party said that it had an answer to the level of unemployment at that time. It said so and implied so in its advertising campaign, and it has failed. In that respect it cheated the public, and it is reasonable for hon. Members to point that out.

Mr. Bruce-Gardyne: The point of the hon. Gentleman's argument that I heard was that this Government were directly responsible for the cost of unemployment represented by the supplementary benefits before us tonight. That was the point to which I thought it necessary to address my remarks.
The hon. Gentleman is right to say that in the last two years of the Labour Government the levels of unemployment were falling, but they were doing so when the levels of public expenditure were sharply reduced, not increased. After the intervention of the International Monetary Fund, which put the Labour Government on the rails, they reduced public expenditure which was accompanied by a reduction in unemployment. If I go further with that line of argument, I am sure that I shall be called to order.
The hon. Member for Stockport, North (Mr. Bennett) advanced a proposition which has been advocated both inside and outside the House. It needs correction tonight. The proposition is that the money spent on supplementary benefit for the unemployed would be better spent on

providing employment for the people who draw it. As a straightforward proposition that is unanswerable, but unfortunately the mathematics are not so simple.
I shall deal with other figures later, but on average the direct cost to the Government and the taxpayer of one person out of work is about £30 a week. If we assume that we could take into employment someone from the unemployment register at a wage of £90 a week—and that is not by any standards a princely wage—we should save the £30 a week in direct unemployment costs, we should recover £30 in tax and be left with a gap of £30. Thai is the problem. That gap would add to public expenditure, increase our need to borrow and raise the cost of interest, and we should remove from one quarter jobs which we were creating in another. I am afraid that the proposition, taken in its simplest form, does not stand up.

Mr. Andrew F. Bennett: The Minister gave the £30 example. What are the actual figures? The Treasury refuses to give the full costs. I said that the cost would be £6, 006—the Library estimate of what it would cost in 12 months for an unemployed married man with two children. For the Treasury to say that that figure is either true or wrong would advance the debate. Most of my constituents would settle for £6, 000 as a wage.

Mr. Bruce-Gardyne: The hon. Gentleman would do better to listen to the argument. I explained that I would come to precisely that argument later.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) made a number of important points. I do not dispute the validity of some of his arguments. I hope that he will understand when I say, however, that, to a considerable extent, he raised matters on which it would be unwise of me to comment because they are matters for the Departments of Employment and Health and Social Security. I shall draw the hon. Gentleman's remarks to the attention of other Ministers.
The hon. Gentleman emphasised that it would be so much better if the money currently spent on supplementary benefit were used for the provision of work experience and training. I think he will understand that we have substantially increased the sums available for these purposes.
There is, however, a related point to which we should pay particular attention in discussing these matters. My right hon. and learned Friend drew attention to it in his Budget speech, when he said:
Somewhere in the gap between the levels of income which we pay to those out of work and the earnings enjoyed by those who have a job are rates of pay which those now out of work would be glad to take if they had the chance."—[Official Report,  9 March 1982; Vol. 19, c. 731.]
This is one of the crucial difficulties that we face. For a variety of reasons which would run wide of the debate, in many sectors we have raised the level of wages above the market clearing rate. I suspect that that is one of the reasons for the appalling increase in unemployment in recent years. If we could get into the gap to which my right hon. and learned Friend referred, I think that we should be moving to some extent in the direction to which the hon. Gentleman referred. That is precisely what the community work scheme is designed to try to achieve.
I entirely recognise the validity of some of the hon. Gentleman's arguments and shall certainly bring them to the attention of my right hon. and hon. Friends.
I turn to what has been the basis and the core of this debate initiated by the hon. Member for Fife, Central. I


apologise for interrupting him in his opening remarks, but I was somewhat bemused by what he said about the figures that he had obtained from the House of Commons research division.
I have now obtained a copy of the note to which the hon. Gentleman referred. I must say that I am a little astonished at the format that the research division has used. It quotes a figure, which the hon. Gentleman also quoted, which it simply attributes to the Treasury. One has to dig around to discover that it refers not to a Treasury figure but to a report which appeared in The Times. I must say that I find it rather deplorable that the research division of the House of Commons should present statistics in such a misleading way.

Mr. William Hamilton: I think that the Minister should be careful about what he says. I do not think that that interpretation can be put on the document. The House of Commons Library is very careful about these things. The document makes it fairly clear that the figures attributed to the Treasury are contained in Treasury economic progress reports. It makes it clear on page 2, after the diagram showing the three estimates—of the Treasury, the Institute of Fiscal Studies and the Manpower Services Commission.

Mr. Bruce-Gardyne: ; The document that I have in front of me refers to the economic progress report of February 1981, and I will come to that in a moment. However, it builds upon figures which, it transpires, are drawn not from the Treasury but from an article in The Times. I take exception to the way that the statistics in this research note are presented as coming from the Treasury. To put it gently, that is a very slack way of presenting those statistics. [Interruption.] If the hon. Member for Stockport, North will possess himself for a moment he may learn something.
The hon. Member for Fife, Central referred to an article in The Times on 18 February which announced:
Ministers have suppressed publication of official estimates which show that the cost to the Government of each extra person unemployed is now £5, 000 a year".
Ministers have suppressed no such figure. As the hon. Gentleman knows, what happened was that estimates were given in the February 1981 issue of the economic progress report based on detailed assumptions for one particular type of unemployed person, extrapolating that on the basis of an additional 100, 000 unemployed people who had those characteristics. On that basis, an estimate was given of the aggregate additional cost at that time. Of course, that was based on assumptions, as any calculation of that kind is bound to be based.
It is true, and it will come as no surprise to the hon. Gentleman or to the House, that the Treasury constantly tries to update and to refine such figures. The Times appears to have obtained a copy of one such updating. The problem with all such calculations is that they are subject to a wide range of interpretations and to a large number of variables.
How could it be possible even remotely to estimate the additional cost to the National Health Service of unemployment? I readily concede that the shock of unemployment can affect an individual's health. However, can the additional cost of unemployment to the Health Service be quantified and distinguished from other costs? I regret that the answer is obviously and transparently "No, it cannot".
Even when one considers the more closely related cost, the estimate that can be put on the indirect tax that somebody previously employed might have paid—which because of their becoming unemployed they would not pay any longer—are pure guesstimates. They are inevitably worth no more than that.
The hon. Member for Fife, Central very fairly warned the House against falling into the trap of multiplying the cost of an additional 100, 000 unemployed by the total number in receipt of unemployment benefit. Unfortunately, the MSC fell headlong into that trap. The figure that it quoted, which has been cited by several hon. Members, is reconcilable only with the proposition that we could eliminate unemployment. Hon. Members may not have fallen into that trap, but it is extraordinary that a body such as the MSC should have fallen head over heels into it. The Institute of Fiscal Studies nearly did the same.
The best and only reliable figure that we can give—it will not satisfy Opposition Members—was given in response to a question asked by my hon. Friend the Member for Macclesfield (Mr. Winterton) on 18 November 1981. The total additional cost in 1981–82 of an extra 100, 000 on the unemployment register was £165 million, or £1, 650 per annum for each additional registered unemployed person. That is only the direct cost of supplementary benefit, rent and rate rebates and the immediate costs that are quantifiable and clearly and specifically identifiable. However, that is the only wholly reliable figure that we can give.
Some hon. Members have asked for some remarkably wide definitions of cost. However, with the best will in the world, the wider one goes, the more imponderable the figures become. Ultimately, I very much agree with those hon. Members who have emphasised that the important point is the replacement of the cost of supplementary benefit as involved in the Supplementary Estimate with the generation of long-term employment. That is the purpose to which the Budget was dedicated.

Question put and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House; immediately considered in Committee.

Clauses 1 to 3 agreed to.

Bill reported, without amendment.

Motion made, and Question,  That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills) and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Poly-chlorinated Biphenyl

Motion made, and Question proposed,  That this House do now adjourn.—[Mr. Boscawen.]

Mr. Barry Sheerman: Please forgive my eagerness to speak in the Adjournment debate, Mr. Deputy Speaker, but at this time of the morning I am sure you will accept that there is a special place in Heaven for all those called to speak in the Adjournment debate on the day that the Consolidated Fund Bill is considered. I would not have applied for an Adjournment debate if I had not thought that the arguments for airing this important matter were compelling.
I wish to detain the House for a short time to warn hon. Members of the dangers of a chemical that is in our midst and all around us but that is little known to most hon. Members and to most of the general public. I refer to a chemical compound called poly-chlorinated biphenyl. The House will know that early-day motion 331 has already been signed by a large number of Members. There would be double, if not treble, the number but for the fact that every time one tries to persuade one's colleagues to sign the motion one has to explain what poly-chlorinated biphenyl is.
PCB, to refer to it in a shortened form, is a nasty, dangerous and poisonous chemical. It is regarded by scientists and experts all over the world as being more dangerous than other chemicals because many of its poisonous effects are long term and are noticed only over a long period. In other words, the effects of PCB are not seen in terms of immediate burning to the skin, swellings or other symptons that one associates with chemical poisoning. What is known is that PCB is associated with long-term cancers, with long-term environmental pollution, with long-term effects on the growth of children and, indeed, with effects on the unborn child.
In regard to world-wide scientific and medical opinion, it is sufficient to say that many advanced industrial nations have banned the production and use of PCB. That is not the case in the United Kingdom. I hope that the House will understand that what I intend to do this morning is not to point to dramatic measures to raise a scare or to demand that the House instantly abolishes PCB. Too often the House hears chants for instant action which cannot be achieved. There lies the disillusion of the electorate and of our supporters in the polls. It is more responsible to bring to the attention of the House a chemical that is dangerous and needs to be controlled but which cannot be abolished overnight. The House has no power to wipe away the dangers in an instant sunshine manner.
The House can seek to discover where PCB is to be found in the environment in Britain and to take such steps as are necessary to control it in a civilised fashion.
I have asked questions of appropriate Departments, but it is difficult to ascertain how much PCB was manufactured in this country over the years. It was mainly manufactured by one manufacturer, who voluntarily ceased to manufacture it in 1977.
It is also important to work out how much of the chemical was destroyed. It is a very difficult poison to destroy. It can be neutralised under special conditions, at a temperature of 1, 100°C. Unless it is neutralised, if it gets into the food chain, the water supply or any other part of the cycle of our planet's life it stays there and accumulates.
Unlike more natural, simpler chemicals it does not deteriorate naturally into simpler compounds as a result of the action of sunlight and rain. It remains a poisonous chemical. It is cumulative, both in the planet and in individuals who absorb it through the skin or as a result of eating contaminated food and so on. Consequently, this nasty poison is something that all hon. Members should worry about.
Hon. Members might be more convinced if they read some of the reports of those organisations that deal with PCB spills in many parts of the world. The chemical is greatly feared for its long-term dangers to human life, vegetation and the rest of life on our planet. To eliminate those dangers the most extreme measures are taken. Anything that has come into contact with PCB must be burnt at very high temperatures.
Many PCBs form dioxin on burning. Therefore, the chemical must be treated with great respect. It is important to identify where the main concentrations of it are to be found. At certain periods during the past 30 years it has been used in television sets, neon lighting systems and—in small amounts—in a whole range of everyday manufactures, including hair sprays and dyes.
Gradually the information has spread that PCBs are extremely dangerous, and they have been withdrawn from use in the manufacture of most of those products. As I have said, the chemical itself is no longer manufactured in this country.
However, PCB is to be found in large quantities in this country at—this is a conservative estimate—20, 000 sites, in electrical transformers that convert high voltages into lower voltages. Those transformers mainly do not come under the direct control of the electricity supply industry but are in colleges, factories and office blocks in what we would normally describe as private locations. The installations are small, but they contain 200 to 300 gallons of PCB as a coolant. PCB was seen to be extremely useful as a relatively non-flammable coolant. That is one of its great properties and it was often used in electrical apparatus.
Those transformers have been dotted around he country for a long time. We can trace them back through the fifties, sixties, and seventies. The latest one that has been drawn to my attention was dated 1980, which is three years after PCB ceased to be manufactured in the country. Consequently, it should be of concern to the House and the Government that specialist firms involved in the industry have found that a high percentage of those installations are leaking. One estimate is that 90 per cent. are leaking. That is a serious matter indeed.
Many such installations are to be found on the tops of office blocks and other buildings throughout the region. I suggest, Mr. Deputy Speaker, that in your own constituency there are a number perched quite innocently on the tops of buildings. I also have information that some of them are dotted around on greenfield sites in the chain of food production.
If it is right that a high percentage of those transformers are leaking, there is a clear responsibility on the part of the Government to conform with the early-day motion which was tabled in my name and the names of Members of all parties. That called on Her Majesty's Government to take immediate action to create adequate safeguards against the health and environmental dangers of the chemical PCB. That is not a scare-mongering exercise. It is a matter for serious public concern. We should have some central


body, co-ordinated by central Government, and using the resources of local authorities, and trade unions, possibly the ETU which services the installations, to track them down. A register should be created and all those on the register should be examined to see whether they are leaking or in a vulnerable position.
I draw the attention of the House to an article in The Observer of 14 March, 1982 which points out that one of those containers was blown up—I do not think intentionally—in one of the acts of terrorism in Belfast. A relatively large PCB spill occurred. The emergency services rushed in as though it was a normal emergency with all the horrendous aftermath of an explosion. They were not geared up to the fact that they would find a highly dangerous chemical on the scene, and nor would most emergency services.
The reaction of many emergency services, when they see a spillage that looks like oil, is to contain it with sand or wash it away. In Northern Ireland the reaction of many of the emergency services has been to wash that chemical down the drain. It is one of the most dangerous things one can do because we are faced with the possibility that that highly dangerous chemical will get into the sewage works or the water supply, or that there will be some other form of contamination.
I am seriously concerned that many of those called to PCB spills are not aware of the danger in which they put themselves. Often, they handle it like oil. They may come into close contact with it. I am concerned that those in the fire service, the Army and the emergency services may be at grave risk, not in the short term in the sense of an industrial injury that can be identified but in the longer term in relation to something that may affect them and their unborn children. This is a grave threat.
I have in my possession evidence of PCB spills in other parts of the country. I give one example. I wish to allow time for the Minister to give what I am sure will be a considered reply. Some of these transformers are coming to the end of the their useful life. The building in which they are situated perhaps becomes redundant. The piece of equipment is sold to the local scrap merchant who treats it as any other piece of scrap. I have details of the case of a scrap merchant, who pulled out the piece of equipment but in so doing broke the seal of the PCB tank. There was a spillage into the car park of the premises from where it was being removed. The scrap merchant took the piece of equipment on a lorry to his premise, threw it down with the rest of the oil there and set alight to it. Such action can produce a very dangerous environmental pollution problem.
I ask that the Government and the House should take note of the existence of the threat. I do want to see PCB banned. A considered view should be taken of whether it is a threat, as I believe it is, on the basis of all the international evidence, after which the large concentrations of PCB in transformers should be tracked down and dealt with over time. If my estimate of the amount of PCB in the environment is accurate, this will take a long time. Many transformers are not at immediate risk. I ask the House to call on the Government to ensure that those which are most at risk and most vulnerable either through ageing or their location in close proximity to water supply or so, should be dealt with first.
This is my clear message to the House. I believe that there are 20, 000 environmental time bombs in our country. I hope that the Government take the challenge seriously and that they act with great speed.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I congratulate the hon. Member for Huddersfield, East (Mr. Sheerman) on raising a matter of such importance. It may interest him to know that, in addition to myself as a Minister in the Department of the Environment, my right hon. Friend the Member for Westmorland (Mr. Jopling), the Government Chief Whip, has taken a substantial and knowledgeable interest in the problem and is present to lend his interested attention to what the hon. Gentleman has said.
I welcome also the manner in which the hon. Gentleman has raised the matter. All must be concerned about hazards to health and the environment, but I am grateful for the fact that the hon. Gentleman took the view that this is not, and should not be treated as, a panic move. Nor should a response, particularly from me, be one that is couched in panic action terms. There is a problem of which we are aware and about which we have taken some action and shall take further action, bearing very much in mind the remarks of the hon. Gentleman.
PCBs are a range of similar but complex compounds which do not occur naturally. They have useful properties. They are chemically inert, non-flammable under normal conditions, have good electrical insulation properties and also conduct heat well. Because of these qualities, they were, as the hon. Gentleman said, for a number of years regarded as very suitable for a number of industrially important purposes such as filler fluids for electrical transformers and capacitors. They were particularly useful as replacement for flammable oils where a risk of explosion or fire in confined spaces was especially significant, for example, in hospitals, tall office blocks and electricity sub-stations in urban areas. We have no complete record of the number of transformers still in use containing PCBs but it is extremely doubtful whether it is as high as the 20, 000 sometimes quoted. My information suggests that 3, 000 is nearer the mark. However, we have in hand an attempt to try to obtain the information that the hon. Gentleman has asked for. I take the point that we ought, through our various agencies, to be able to detect the number currently in use. Nowadays, PCBs are used only in certain closed systems, and the wider uses made of them in the past have ceased.
I should say something about the dangers of PCBs because the hon. Gentleman rightly drew substantial attention to them. They are directly of low to medium toxicity. They are dangerous in concentrations greater than 500 mg to 1 kg of body weight. This compares with the most toxic dioxin, which is dangerous at 0·0006 mg per kg, or sodium cyanide at 2·2 mg per kg. Therefore, they are 1 million times less toxic than the most toxic dioxin and 500 times less toxic than sodium cyanide. While I certainly agree that PCBs are dangerous if ingested or if taken through the skin, they are not the most dangerous poisons in the world. However, they are also carcinogens to rodents, and, although the evidence for this effect on humans is, I am told, not yet scientifically certain, it is obviously prudent to regard the threat to human beings in that light. Therefore, handling and disposal must be undertaken with great care.
When they get into water, as the hon. Gentleman said, there is a special problem that, although they are not highly soluble, they may be reconcentrated in the food chain and, of course, that gradually moves up until the highest predators—man in general—will obtain the highest dosage.
I would now like to turn to the control systems, and discuss their application to each stage of the manufacture, use and disposal of PCBs because the hon. Gentleman's main concern is arguing for action on the control of PCBs in use and their ultimate disposal. It is rather a complex picture, involving several agencies and administrative mechanisms, which have been brought into play as the situation and the risks have been made clear. We are still making improvements to it, and I will outline several further steps in a moment.
The first stage is the manufacture of PCBs and bringing them into industrial use. In 1973, the Organisation for Economic Co-operation and Development advised its member States that the use of PCBs should be closely confined to those uses and places where they were genuinely necessary. But in fact the sole United Kingdom manufacturer had already done this two years earlier. Two directives from the European Community followed and were applied in the United Kingdom by regulation in 1980. Effectively, PCBs are now only being put into transformers and large capacitors. They are also allowed in hydraulic machinery in the mining industry, but we have no evidence of this use in practice. The total output is much reduced; perhaps more important, the uses are now being concentrated in relatively large pieces of industrial equipment, which are easier to record, maintain control and dispose of.
It is important that the user of plant containing PCBs is aware of the risk and the precautions to be observed and I entirely endorse what the hon. Gentleman said about the available information. The second stage is the identification of plant containing PCBs. Most people in charge of large pieces of industrial plant will have a good idea of what is involved. But, in addition, for about 10 years new tranformers have been labelled with information and advice. At the Government's suggestion, some manufacturers have contacted all their customers, even some who purchased units as far back as the 1940s, advising them of the need for safe disposal. Some retrospective labelling has been clone under this arrangement, and I acknowledge gratefully the co-operation of the industry in supplying information to its customers.
Many of the places where such plant is installed will be places where the Health and Safety at Work Act etc. 1974 applies and inspection becomes another important aspect of this. HSE factory inspectors have written instructions on the hazards of PCBs and the precautions to be observed, and if plant. containing PCBs is found in the course of inspection appropriate advice is given. The employer is under a legal obligation to protect his employees and others against risks of health. This obligation includes informing people entering his premises of the hazards to which they may be exposed and the precautions to be taken.
Therefore, employers have a duty to inform the emergency services of risks on their premises such as the presence of PCBs. In that connection it is common practice for the fire service, as part of its fire prevention and training duties, to pay what are known as good will

visits to premises in order to become familiar with the general layout of the building and the hazards that may be encountered during an emergency.
PCBs are not in themselves a fire risk, as the hon. Gentleman said. However, the fire brigade is among the emergency services which often become involved in cases of accidents involving spillages of chemicals, and the more that they can know about the risks in their area the better, whether their own officers get it in the course of advisory visits or whether firms, perhaps stimulated by the factory inspectorate, tell them. My Department and the Health and Safety Executive are continually trying to improve information and procedures, and I have asked officials to discuss with the Home Ofice, as a result of the points made in the Early-Day Motion the various means by which the fire brigade and other emergency services can be more fully informed. If better guidance is needed on how to identify a PCB spillage, or what to do about it, we shall certainly make sure that the emergency services have that advice.
I know that the hon. Gentleman has in mind a particular firm that makes a business of emptying old transformers. That company, which is in my constituency, operates a perfectly safe process. Two members of my staff from the Department of the Environment visited the premises, and the disposal of PCBs from that company is conducted by a major international company by incineration. On that, all that I would say is that in places where PCBs are handled frequently the risks and the need for proper precautions are fully understood. It is in places where they are not so informed that the risks surely will arise.
I wish the House to see the problem in perspective. In the past three years, six cases of significant leakage of PCBs from industrial apparatus have come to the attention of the Health and Safety Executive. Five of those cases were due to external damage, and only one to external corrosion. Neither the Health and Safety Executive nor my Department has any evidence that the material degrades sufficiently during its service life to give rise to leakage from internal corrosion. That is a far cry from the statement I have seen—the hon. Gentleman referred to it again—that 90 per cent. of such installations are leaking. I do not, however, doubt that as the installations become older, the need for maintenance, repairs and replacements will continue to rise. There is certainly a continuing case for care, and we must begin with better information. But the information that matters most is that held by the people in charge of the machine or equipment. They are the people who must know what they have got, and what to do—as well as what not to do—if something goes wrong. I also accept that there is a need to build up better information among the authorities concerned, especially the emergency services. This will, for practical reasons, not happen overnight—I welcome the hon. Gentleman's understanding of that—but we can look forward to a steady increase in the amount of information that they hold.
The next stage is to monitor PCBs in the environment. They are in the main liquids, not highly volatile, and the likelihood is that PCBs on the loose, as it were, would find their way most readily into water. Regional water authorities already monitor the rivers for Which they are responsible. The intensity of water authorities' monitoring depends on their assessment of the risk of contamination. In the time available since the hon. Gentleman gave notice of his wish to raise this subject, I have not been able to carry out a thorough check, but I have asked the


Department of the Environment to have discussions with water authorities about the intensity and effectiveness of their monitoring activities—though it must be, in the end, for their judgment to decide what is necessary and what is worthwhile. Nonetheless, I accept entirely the point that the hon. Gentleman raised.
The final matter is the safe and environmentally acceptable disposal of PCB waste. That is very much a responsibility of my Department. The prime responsibility of the Health and Safety Executive is for operational safety, but neither the Department of the Environment nor the Health and Safety Executive takes a narrow view of its field, and both together would be concerned with an accidental leak which, for example, contaminated soil that

became waste. It is clearly better to have a duplication of interest rather than a gap. I can assure the House and the hon. Gentleman that there is no gap.
On legislation, we have the Control of Pollution Act 1974 and the complete system of licensing, under which local authorities can say what wastes, and in what sorts and quantities, may use any waste disposal route. We also have the special wastes regulations which provide additional requirements for transport and record-keeping for wastes such as PCBs. As to advice on PCBs, Waste Management Paper No. 6 of 1976 is still a valid document—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour,  MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at sixteen minutes to Three o'clock on Wednesday morning.